Naija Tech News (NTN) on 21, and in content, U.S. government: Apple and Google operate like “one company” in the search business, apple, Google, Sundar Pichai, Tim Cook, U.S .
The US government’s antitrust lawsuit against Google disclosed details of a multi-billion-dollar secret transaction between the company and Apple. It shows that Apple executives once said to their colleagues working at Google that Apple and Google are “one company” in the search business.
The lawsuit filed by the US Department of Justice on Tuesday focused on a payment agreement reached by Google to make its search engine the default search engine for browsers on mobile phones and other mobile devices. And Google search becoming the default search engine for iPhone and other Apple mobile devices is the largest agreement among them.
The US government said that Apple CEO Tim Cook and Google CEO Sundar Pichai met in 2018 to discuss the transaction. After that, a senior Apple employee who did not want to be named wrote to his colleagues at Google, “We expect that our work is like we are a company.”
The U.S. Department of Justice also cited internal Google documents that the deal with Apple is an “important revenue channel” for the search giant. According to the content of the lawsuit, nearly half of Google’s search traffic in 2019 came from Apple products.
Many of these details have not been disclosed before, and may support the US government’s allegations that Google is using these agreements to block search competitors and reduce user choices. Google claimed that the lawsuit filed by the US government was “seriously flawed,” and that it would harm consumers’ interests and would “artificially support” low-quality search products.
The US Department of Justice paid special attention to the agreement reached between Apple and Google in the lawsuit, saying that the agreement “deprived Google’s search business competitors of an important distribution channel for a long time.”
According to analyst estimates, Google pays Apple billions of dollars each year to make its search products the default search engine for Apple’s mobile devices. This means that when users buy a new iPhone or other Apple devices, the default search engine set inside the Safari browser is Google Search. According to the U.S. Department of Justice, Apple users can also choose to manually switch to Microsoft’s Bing, Yahoo Search or DuckDuckGo, but “few people do this, which makes Google the de facto exclusive search engine in Apple devices.”
The US Department of Justice stated in the lawsuit that it is estimated that through this agreement, Apple will receive 8 to 12 billion U.S. dollars in revenue from Google each year. And Apple’s revenue from this search business transaction is part of the company’s growing service business, a key indicator that Apple has frequently emphasized to investors and analysts in recent years.
The U.S. Department of Justice stated: “By paying Apple part of the monopoly rent it obtains from advertisers, Google has combined Apple’s financial incentives with its own practices and set the price of its advertising business extremely high.”
As part of the agreement, Google is also the default search engine for Siri and iOS system searches, thus replacing Apple’s agreement with Microsoft in 2017. Apple does not provide users with a method to switch search engines during the initial device setup process, nor does it recommend that users switch search engines when they use the Safari browser on Apple devices for the first time.
Apple said that in addition to modifying the default search engine after setting, users can also access third-party search applications, third-party voice assistant applications, or visit other search engine websites.
In 2019, Apple’s chief compliance officer, Kyle Andeer, stated at a U.S. Congressional hearing that the company “had conducted a public comparison to understand what is best for consumers, and consumers have always chosen Google.”
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