Google-Apple search engine deal under fire from regulators
The Competition and Markets Authority has called for better legislation to regulate large technology companies
In a market study report published yesterday, the CMA branded the deal as “a barrier to expansion for other search engines”, arguing that such agreements are capable of hindering competition and innovation.
According to the report, titled Online platforms and digital advertising, Google has managed to generate around 90% of UK search traffic each year over the last decade and generated at least 90% of UK search advertising revenues in 2019. That same year, the search engine and Apple came up with a £1.2 billion-deal which kept Google as a default in the Safari search engine.
The report claims that last year, rival search engines to Google told CMA that this financial deal was “one of the most significant factors inhibiting competition in the search market”. Google remains largely unaffected by the existence of other search engines, retaining 86% of the global market share, with its closest rival being Microsoft's Bing, which holds just 6.25%.
Google’s competitive advantage stems from its access to vast pools of user data which are sourced from multiple services. The CMA compared it to the demographic and social advantage of Facebook, which is used to offer companies targeted advertising campaign opportunities.
“Advertisers and media agencies have told us that Google offers in-depth targeting options, driven by its unique and vast sources of data, while Facebook has the advantage of offering the ability to target specific audiences based on demographic characteristics, interests and location,” said the CMA. “This creates a substantial competitive advantage for Google and Facebook, both of which have access to more extensive datasets than their rivals.”
The regulator found that “the inability of smaller platforms and publishers to access user data creates a significant barrier to entry” and called for better legislation to regulate large technology companies.
The CMA has also joined forces with Ofcom and the ICO to manage the regulation of digital services to ensure they act in a way that's fair for businesses and consumers.