Apple received the "substantial majority" of the 1.2
billion pounds ($1.5 billion) that Google paid to be the default search engine
on a variety of devices in the United Kingdom in 2019.
The payments by
Alphabet Inc's Google to Apple Inc to be the default search engine on Apple's
Safari web browser create "a significant barrier to entry and
expansion" for Google's rivals in the search engine market, the UK
markets regulator said in a report released on Wednesday.
Apple received the "substantial majority" of the 1.2 billion pounds ($1.5 billion) that Google paid to be the default search engine on a variety of devices in the United Kingdom in 2019, according to the report.
The U.K.
Competition and Markets Authority, in its final report investigating online
platforms and digital advertising, said the arrangements between Apple and
Google create "a significant barrier to entry and expansion" for
Google's rivals in the search engine market. Those rivals include Microsoft
Corp's Bing, Verizon Communications Inc-owned Yahoo and independent search
engine DuckDuckGo, all of which also make payments to Apple
in exchange for being search engine options on its devices, the report said.
"Given the
impact of preinstallations and defaults on mobile devices and Apple's
significant market share, it is our view that Apple's existing arrangements
with Google create a significant barrier to entry and expansion for rivals
affecting competition between search engines on mobiles," the regulators
wrote in the report.
Apple and Google
did not immediately return requests for comment.
Bernstein analyst
Toni Sacconaghi earlier this year estimated that Apple generates about $9
billion per year globally from licensing arrangements, revenue with gross
margins above 90% and with about 80% of the total coming from Google. Apple
reports the revenue in its services segment, which investors are looking to for
growth as consumers slow the pace of iPhone upgrades.
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