Mobile ecosystems: Competition in the supply of mobile browsers and search engines

What are mobile browsers and browser engines?

Mobile device users access the Internet through a mobile browser. Mobile browsers are composed of two main elements, namely a browser engine and the user interface (UI) of the browser.

Browser engines are responsible for interpreting the source code of each web page. Browser engines are responsible for web compatibility (ensuring that browsers can access and display the content of a web page) and determine the range of possible user inputs, such as camera, microphone, or video game controller . The three main browser engines are Blink from Google, WebKit from Apple and Gecko from Mozilla.

The browser user interface sits above the browser engine and is responsible for features such as bookmarks, browsing history, and remembering passwords. Users are familiar with browser UI, like Chrome, Edge, Safari, Firefox and Samsung Internet.

Keep in mind, as it will be important to understand the business case for browsers, that “browsing” is different from “searching”: a browser must be paired with a search engine. This means that browsers are an important “mediator” between search engines and end users, but search is the “source of revenue”.

What does the browser market look like?

Many operators distribute their own browsers. Browsers can be a dedicated standalone app installed on your phone, or apps (such as Snapchat) can have their own built-in browsers that allow users to access web content without opening another browser.

However, the CMA found that the browser offering is concentrated between Google’s Chrome and Apple’s Safari: in 2020, Safari’s share is 48% on mobile devices while Chrome’s share is 40% on mobile devices. The browser engine offering is also concentrated between Google Blink, with just under 50% on mobile, and Apple’s WebKit, with just over 50%.

What is the business case for the browser?

Browsers are not directly monetized: browsers come pre-installed or can be downloaded for free, and using a browser to access web content is free. The three major browser search engines are also open source and not directly monetized.

The main source of income for browsers is the search engines to which they direct traffic.

Browser vendors can set their own default search engines, but following a European Commission decision, Google now allows users to choose their search engine for Chrome (although the CMA says almost all users choose Google Search).

Browser vendors without their own search engine sell the default setting: in the UK, Google pays over £1 billion a year for third-party browsers, including Apple’s Safari, to direct traffic to Google Search.

Browsers also play a role in allowing companies to monetize their content by serving users advertisements (or “ads”). These companies, and the ad technology intermediaries operating on their behalf, in many cases collect and use data about users’ browsing behavior in order to display targeted advertisements to them.

Browsers may also be developed and distributed by vendors to complement their other products: for example to improve the user experience of their native applications.

Competition in browser engines

The CMA found that there are two main barriers to competition in browser engines, namely browser engine restriction on iOS and web compatibility.

The WebKit Restriction

Apple has required all browsers on iOS to use WebKit as the browser engine. Browser vendors are also unable to make further adjustments to WebKit.

Apple said the restriction is driven by security and privacy concerns. But the CMA concluded that the evidence it has seen so far does not suggest that there are significant differences in the security performance of WebKit and alternative browser engines.

The CMA says this restriction causes a lack of competition in browser engines on iOS, leaving it up to Apple to determine what features a browser can offer on iOS.

The CMA reports that it has received submissions stating that WebKit lags other browser engines in feature support, general performance, and web application support.

Web compatibility

Web compatibility refers to the ability of a browser to correctly access and display the content of a web page, which mainly depends on the browser engine. Web compatibility issues appear to be influenced by network effects, where the more users a browser has, the more likely online content providers are to ensure that their website is compatible with that browser engine. This is getting worse, making it more difficult for smaller browsers to compete and newer browsers to enter.

Competition in browsers

These barriers to competition in browser engines also limit competition in browsers. The impact is also exacerbated by pre-install and default settings in browsers and Apple and Google limiting browser access to certain features on iOS and Android.

The CMA found that pre-installed browsers have a significant impact on consumer behavior:

  • Safari is the default browser pre-installed on iOS mobile devices. Its share of supply in iOS mobile browsers is 93%.
  • Chrome comes pre-installed on most Android mobile devices and has an Android mobile browser share of 75%.
  • Samsung Internet is pre-installed and set as default on 56% of Samsung Android mobile devices and has a supply share in Android mobile browsers of 15%.

Although users can change browser settings, the CMA has concluded that, based on user surveys, including a consumer survey commissioned by the ACCC, consumers have a strong tendency to stick to pre-installed and default browsers. Ease of switching also plays an important role in mitigating the importance of pre-installation and default settings. A longer and more complex process to change the default browser probably reinforces the impact of predefined defaults.

The AMC also considered that there were limits to the effectiveness of the Google Play store choice screen. These concerns included that the choice screen did not allow users to change the default browser setting at the time they decided to download an additional browser.

CMA has also received submissions from browser vendors citing concerns about access to APIs and other features on iOS and Android. Most browser vendor submissions reported that there are features used by Safari that are not available to other mobile browsers on iOS devices. Some key examples of features not available to other mobile browsers include privacy and security features, Safari-exclusive browser extensions or add-ons, and device APIs for accessing audio features and webcams.

The evidence received regarding Google was more mixed. Some vendors have indicated that there are no major features available on Chrome that are not available on their own mobile browsers. Other browser vendors have given examples of more restrictive interoperability for other browsers (for example, Yandex has indicated that Google may prevent other browsers from using technology that allows users to provide biometric authorization). AMC’s conclusion is that, overall, there seem to be fewer concerns about API access on Android compared to iOS.

Where is the CMA going?

The CMA’s conclusion is that Apple and Google have substantial and enduring market power in the supply of browsers and browser engines and that there are significant barriers to entry by competitors.

The MAC is also concerned that Apple and Google could use their position in browsers to strengthen or enhance their market position in other businesses, including:

  • By limiting the functionality of web apps, Apple may seek to increase the adoption of native apps, thereby strengthening its strong position in the distribution of native apps on iOS;
  • Google may use its market power in browsing engines and browsers to strengthen its strong positions in providing advertising inventory and ad technology services through its privacy sandbox proposals;
  • Apple, as the sole manager of WebKit (the only browser engine allowed on iOS), can make open display advertising on iOS less appealing by limiting user tracking across browsers. This may diminish the competitive constraint of display advertising over search advertising, thereby reducing the viability of the web as a content distribution channel and strengthening Apple’s strong positions in the distribution of native apps on iOS; and

Thanks to the search agreements between Apple and Google, Apple derives significant revenue from Google search traffic on Safari. The continued placement of Google Search as the default search engine on Safari also reinforces Google’s strong position in general search.

Rosemary S. Bishop