Newsletter
It’s no secret that Google pays Apple approximately $15 billion each year to be the default search engine on Apple devices, a relationship that authorities have criticized for some time. However, a new report from The Register has shed light on a previously unknown financial arrangement between the two companies. The report claims that on top of the $15 billion that Google pays, Apple also receives a percentage of Google Chrome search revenue on iOS in return for Google staying the default search engine.
While the exact nature of the benefits is still unknown, this report has raised eyebrows among regulators and sparked a lawsuit against the two tech giants. The suit, filed in the United States District Court for the Northern District of California Oakland Division, claims that Apple and Google violated sections 1 and 2 of the U.S. Sherman Antitrust Act by agreeing not to compete in the search business, thus eliminating the possibility of Apple being a competitor to Google.
Moreover, the suit questions Apple’s agreement to include Google Chrome as the initial search engine on all Apple devices as it gave “Google a substantial and unfair anti-competitive advantage over other search providers, actual and potential, including Yahoo!, DuckDuckGo, Bing, and others.”
Financial agreements between top executives
The lawsuit also alleges that Steve Jobs, then-CEO of Apple, and Eric Schmidt, former CEO of Google, had financial agreements to suppress and eliminate potential search providers that Google did not favor and that both companies negotiated these agreements regularly. The filing states that this agreement “substantially, adversely, and anti-competitively affected” the prices, production, innovation, and quality of the search business.
Although Google is seeking to dismiss the case, the report has piqued the interest of the UK’s Competition and Markets Authority (CMA), which was already investigating the financial relationship between the two companies. It remains unclear how this case will unfold, but it is apparent that the financial arrangement between Google and Apple has raised concerns among regulators and could have significant implications for the search market and the tech industry as a whole, potentially leading to significant changes.