Mike Peterson
Google's deal with Apple to maintain its standing as the default search engine for iOS devices is reportedly at the heart of a recent Justice Department lawsuit against the tech giant.
On Tuesday, the Department of Justice filed an antitrust lawsuit against Google that accused the company of abusing its power over the internet search industry. The deal with Apple and other companies is cited as part of the department's argument.
Within Google, the prospect of losing the default position was thought to be so dire that it was internally dubbed "Code Red," according to a new report from The Wall Street Journal.
Google search is the default search engine in Safari and for Siri on iPhone and iPad devices. According to the Journal, that has been a major source of revenue for both companies. In 2018, for example, Google is said to have paid Apple upwards of $9 billion to maintain the arrangement.
Although neither company has confirmed how much the deal is actually worth, the lawsuit indicates that it accounts for between 15% and 20% of Apple's annual profits. That suggests payments of as much as $11 billion.
Furthermore, the prominence of the deal between the two tech giants in the Justice Department's lawsuit likely indicates that it will intercede in the relationship.
In 2018, the department says, Apple CEO Tim Cook and Alphabet/Google CEO Sundar Pichai met to discuss how both companies could work together to drive search revenue growth. After the meeting, a senior Apple executive told a Google counterpart that "our vision is that we work as if we are one company," the lawsuit claims.
Google, for its part, signaled that it could challenge the litigation. In a response on Tuesday, the search giant called the lawsuit "deeply flawed" and claimed that users choose — and are not forced — to use Google search.
The Mountain View-based company has come under antitrust scrutiny in the U.S. and elsewhere. Earlier in October, the House Judiciary Committee wrapped up a yearlong investigation that found Google and other tech giants enjoy monopoly power over their respective domains.
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20 Comments
Ok but one can’t have it both ways. They cannot argue that users specifically choose to use google search because of its superiority, but then also pay Apple a vast fortune to set it as default. And by the same token if it is indeed so easy for users to change to the search of their preference (which on a technical level it is) and again, if it’s the search engine of choice why are they preinstalling it everywhere they can and why is it so important to have it be the default app to begin with. The fact is that most people will simply use whatever comes preinstalled. Few will take time to download and try different engines to see which is the best for them or to compare as they are in many respects lazy like that and people over 35 are less savvy to these things anyway. My sisters are 28 and I don’t think any of them are very familiar with iOS settings or know they can change default browser or search and the same for many of my friends of similar or even younger ages. So I think they’re being quite disingenuous in their arguments.
I think it’s so tough to decide this sort of thing. As the prior post said, everyone has options. Years ago when you wanted gas in your car there was only one company that supplied gas, so anti-trust laws were developed. The current situation is sooo different. Times are changing, clearly the laws need to change before cases like this go through. IMO