According to a new report, Google may allegedly be paying Apple a share of search revenue that originates from Google Chrome on iOS. The report speculates that this could explain why Apple has not introduced a competing search engine or invested in the advancement of its Safari browser to the point where it could become a viable alternative to Chrome.
Google Chrome’s standing in the search engine market is far from clean-cut
The multibillion-dollar payment that Apple receives from Google each year in exchange for making Google Chrome the default search engine on iPhone, iPad, and Mac accounts for the majority of the tech giant’s Services revenue. A new report from The Register today asserts that while the acquisition itself has been the subject of regulatory review, there is also another significant element to Google and Apple’s financial relationship.
According to the article, Google gives Apple a part of the search revenue generated by consumers using Google Chrome on iOS. The publication cites a “source familiar with the matter.” How much Google is paying Apple under the terms of this agreement is unknown
The United Kingdom’s Competition and Markets Authority is reportedly looking into this revenue-sharing arrangement, according to The Register. Citing the regulator’s 356-page report, published June 10 last year, the publication highlights the following points:
Google pays Apple a share of the search revenue it earns from browser traffic on iOS in the following contexts: in return for being the default search provider on Safari, Google pays Apple a share of revenue derived from Safari search traffic; and pursuant to various commercial arrangements, Google pays Apple a share of revenue derived from [redacted] search traffic.
Under these agreements, Apple receives a significant share of revenue from Google Search traffic on Safari and [redacted] on iOS devices. Google’s estimated payments to Apple for search default status on Safari (£[1-1.5] billion total in 2021 for the UK) were substantially more than those made to its next largest partner, Samsung.
Given this revenue share, when [redacted] or Safari is successful in competing for an iOS user, rather than winning a full share of the search traffic revenue it only wins a partial share (ie the revenue to which it was not previously entitled). These revenue sharing arrangements therefore dampen incentives for competition between browsers on iOS.
The report also mentions a California antitrust action that was filed in December 2021 and was revised in March 2022. In order to remove the threat and concern of Apple as a rival to Google Chrome, the report claims that Google paid billions of dollars to Apple and promised to share its revenues with the tech giant.
The CMA apparently informed The Register that it “cannot comment on or disclose any confidential information.” As for Apple and Google, they did not respond to the publication’s request for comment.