Exclusive - The EU's new tech law is working - Smaller browsers are winning market share

Supantha Mukherjee and Foo Yun Chee reported.

STOCKHOLM/BRUSSELS (Reuters) - European Union standalone browser companies saw a surge in users in the first month after European Union legislation forced Alphabet's Google, Microsoft and Apple to make it easier for users to switch to competitors' browsers, according to data provided by six companies to Reuters.

The European Union's Digital Markets Act, aimed at eliminating unfair competition, came into effect on March 7, forcing big tech companies to have initial success by offering mobile users the ability to choose from a list of available Web browsers on a "selection screen."

Browsers are software that help users connect to the Internet and have traditionally been offered for free by large technology companies such as Apple and Google in exchange for selling advertisements on websites that track consumer visits.

Chrome is the default browser on mobile devices running Android, while the iPhone uses Safari, and these two browsers dominate the market.

Aloha Browser, based in Cyprus, said user numbers in the European Union jumped by 2,50% in March, one of the first companies to announce monthly growth figures since the new rules came into effect.

Founded in 2016, Aloha Browser positions itself as a privacy-focused alternative to browsers owned by large tech companies, and with an average of 10 million monthly users, it earns money by paying for subscriptions, rather than by tracking users to sell ads.

"Previously, the EU was our fourth largest market, now it is our second largest," said Andrew Frost Moroz, Aloha's Chief Executive Officer, in an interview.

Vivaldi in Norway, Ecosia in Germany and Brave in the US have also seen a rise in the number of users after the implementation of the new policy.

DuckDuckGo, based in the U.S., has about 100 million users, and its larger competitor, Opera, based in Norway, has also seen an increase in users, but says the rollout of choice screens is still incomplete.

"Opera has more than 324 million users worldwide, and we currently have a record number of users in the European Union," said Jan Standal, vice president of agriculture at Opera.

Selection

Under the EU's new rules, cell phone software makers will be required to display a screen of choice when users set up their phones, allowing them to select browsers, search engines and virtual assistants.

Previously, tech companies such as Apple and Google loaded phones with default settings that included their preferred services, such as Siri, the iPhone's voice assistant.Changing those settings required a more complicated process.

Apple now shows up to 11 browsers in addition to Safari in the selection of noodles for the 27 countries in the European Union, and will update these noodles once a year for each country.

In Apple's list, DuckDuckGo and Opera browsers are available in all 27 countries, Aloha browser is available in 26 countries, Ecosia browser is available in 13 countries, and Vivaldi browser is available in 8 countries.

Google is currently displaying the browser selection on devices made by the company, and it says that new devices made by other companies running the Android operating system will also display the selection in the coming months.

A Google spokesperson said they don't yet have data about the selection screen to share.

Since the iPhone has a larger market share than Google-branded phones, the growth of smaller browsers is currently coming at the expense of Safari.

Opera says that much of the positive trend comes from people using Opera as the default browser for the iPhone.

But browser companies have criticized the way Apple and Google are rolling out new features, which they say are slow and clumsy, and which they say is slowing down the migration of mobile users to new browsers.

Mozilla, which owns Firefox, estimates that only 19% iPhone users in the region have received the update, which appears to be rolling out much slower than previous software updates.

Jon Stephenson von Tetzchner, chief executive officer of Vivaldi in Norway, said that on the iPhone, users can only see the selection surface when they tap Safari, and then they see a list of browsers, but no other information.

"The process is so complicated that [users] are most likely to choose Safari or another name that's already known," said Jon Stephenson von Tetzchner, chief executive officer of Vivaldi in Norway.

The complexity of the design led the European Commission to start an investigation into whether Apple had violated the law by preventing users from having a genuine choice of service.

(Reporting by Supantha Mukherjee in Stockholm and Yun Chee in Brussels; Editing by Kenneth Li and Daniel Wallis)