As we await a judge’s ruling on the penalties that will be applied to Google following on from the landmark court ruling that the company had maintained an illegal monopoly in online search, we’re learning more about Apple’s role in what might come next.
Google has long provided the default search engine in Safari, Apple’s web browser, paying Apple a percentage of the revenue generated by Google searches originating on Apple iPhones, iPads, Macs and other devices — an arrangement that in 2022 amounted to $20 billion, according to a court declaration filed on Dec. 23 by Eddy Cue, Apple’s senior vice president of services.
A change to that relationship is one potential outcome of the Google antitrust case.
But in his declaration, Cue took issue with proposed remedies that he said would interfere with Apple’s ability to deliver products that best serve its users.
“From what I understand, Plaintiffs’ proposed remedies assume that, without a revenue sharing agreement or other commercial terms with Google, Apple would develop its own search engine or enter the Search Text Ad market,” Cue wrote. “Apple witnesses can offer testimony and evidence explaining why that assumption is wrong.”
Cue gave three main reasons why Apple wouldn’t want to make a search engine. First, it would divert Apple’s attention, money and employees away from Apple’s core products. Second, because of advances in AI, the search engine market is evolving too quickly and it would be too economically risky to jump in the pool at this stage. Third, he, wrote, Apple doesn’t have enough of the right talent or infrastructure to compete in the advertising business.
The logic makes sense. Microsoft has spent somewhere between $80 billion and $100 billion on Bing only to capture about 10% of the market while Google commands the other 90%. It took Bing six years to turn its first profit.
It will be a while yet before the matter is resolved. A two-week remedies trial is scheduled for April.
The Department of Justice, which brought the antitrust case against Google, has made a number of recommendations for creating a more level playing field in search — including an end to the the agreements Google has with companies like Apple and Samsung to favor its search engine on their phones.
Cue said that if the court stops Google’s payments, that would give Apple “two unacceptable choices.” It would have to give Google access to Apple’s user base for free or Apple would have to remove Google search from Safari and seek deals elsewhere, even if Apple users prefer Google search. Cue asked the court to let Apple testify to ensure that remedies for Google’s monopoly don’t hurt other companies.
The DOJ’s recommendations also include Google selling off its Chrome browser and its Android phone operating system.
Apple didn’t immediately respond to a request for further comment.