The EU’s $5 billion Android antitrust ruling has emboldened phone manufacturers and the makers of other search engines and apps
Believe it or not, there are still would-be Google challengers in Europe. One is Qwant, a French startup that says its search engine doesn’t track users or filter search results. Earlier this year, when Chief Executive Officer Eric Leandri pitched phone makers on shipping their devices with his search engine installed on them, “the answer at that time was ‘zero chances,’ ” he says. Following a swell of interest this summer, he’s been working on a deal to install Qwant on the phones of one big brand, which he declined to name, that turned him down in March. “Something has changed,” Leandri says.
That something is the European Union’s antitrust landscape. The EU’s $5 billion July ruling against Google’s Android operating system also demanded changes to reduce the company’s self-promotion on Android devices, and it’s giving rival search engines and web browsers a rare chance to compete. Although Google appealed the ruling on Oct. 9, a day before its deadline—and has been so dominant for so long that Europe has few companies capable of mounting a credible offensive—this is the best chance they’ve had in many years. Google didn’t respond to requests for comment for this story.
The EU antitrust ruling turned in large part on the contracts that require Android phone makers to preinstall Google’s search engine and Chrome browser on their devices in exchange for the use of Google’s app store, Play. The agreements have helped Alphabet lock down more than 97 percent of European mobile searches and almost two-thirds of the mobile browser market, according to internet traffic analyst Statcounter. In July the EU ordered Google to change these contracts by Oct. 28, potentially opening billions of dollars’ worth of digital real estate. The company has to make the changes despite its appeal. Google is “still figuring out what we need to do,” company attorney Tero Louko said last month. He suggested that Google might charge manufacturers to use Android.
At least one of the largest Android manufacturers believes its current deal is flexible enough to install the other apps it wants, and it will likely keep Google apps on future devices, according to a person familiar with the matter. Google also pays manufacturers to make its search engine and apps the default. It will pay Apple Inc. as much as $9 billion this year for the default search slot in the iPhone’s web browser and elsewhere, Goldman Sachs Inc. estimates. In just the second quarter of 2018, Google paid $3 billion to such partners to distribute its search engine, up from about $2 billion a year earlier. “Because Google can outpay everyone, this is where the EU ruling is pretty weak,” says Marc Al-Hames, managing director for German search engine Cliqz.
Still, the dramatic rise in Google’s costs is a testament to the potential for competition. At Qwant, Leandri says he’s offering phone makers a better deal, because he’s not trying to build an app ecosystem to lock in users and their ad dollars. Now he and his product will just have to convince everybody else. Natalia Drozdiak, with Aoife White
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