Apple to Defend Google Revenue Sharing Agreement
Jody Godoy (Hacker News, Reddit):
Apple has asked to participate in Google’s upcoming U.S. antitrust trial over online search, saying it cannot rely on Google to defend revenue-sharing agreements that send the iPhone maker billions of dollars each year for making Google the default search engine on its Safari browser.
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Apple received an estimated $20 billion from its agreement with Google in 2022 alone.
In a declaration filed with a U.S. federal court in Washington, D.C. last week, Cue said Apple is against the idea for the following reasons[…]
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Earlier this year, as part of the U.S. Department of Justice’s antitrust trial against Google, the court declared that the deal that sees Google set as the default search engine in Apple’s web browser Safari is illegal. In his declaration, Cue asked the court to allow Apple to defend the deal by having its own witnesses testify during the trial.
“Only Apple can speak to what kinds of future collaborations can best serve its users,” wrote Cue. “Apple is relentlessly focused on creating the best user experience possible and explores potential partnerships and arrangements with other companies to make that happen.”
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If the agreement can no longer continue, Cue said “it would hamstring Apple’s ability to continue delivering products that best serve its users’ needs.”
If Apple thinks Google Search is the best for users, it could still offer it as the default. It just wouldn’t get the TAC.
Previously:
- Vlad Prelovac on Kagi Search and Orion
- DOJ Wants Google to Sell Chrome and De-Google Android
- Google Search and Ads Monopoly
- Cue Testimony in US v. Google
- Lawsuit Alleges Google Paid Apple to Stay Out of Search
Update (2025-01-06): M.G. Siegler:
The real reason Apple is unlikely to go down a web search path is because they believe – as many now do – that web search is yesterday’s technology. Today is all about AI.
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Said another way, if this were ten to fifteen years ago, Apple may indeed be compelled to go after web search on their own with such a remedy. But in 2025, it makes basically no sense and it would be an expensive distraction at best from what Apple needs to be working on.
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But it’s not like Apple can just rip out Google, or any other web search product, from the iPhone. As Cue notes, that would make Apple’s product experience worse. And so they won’t. Which again leads to the notion that little would likely change if the judge were to accept this remedy in the case – except, again, for those $20B+ yearly payments. Money so large that it even matters to Apple.
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It’s a weird position for the government to be in. They want these deals to be over, but killing these deals completely will probably only hurt Google’s search share marginally, if at all. But it will help Google’s bottom line! Money that Google can then plow back into making their search engine better, continuing the cycle.
And it will hurt Chrome’s competitors.
Today, we filed our own proposal, based on the actual findings in the Court’s decision. This was a decision about our search distribution contracts, so our proposed remedies are directed to that.
The DOJ requested that Google to sell Chrome, end default search deals, share its index with rivals, and potentially sell Android to remedy its search monopoly.
Google’s counter-proposed that its search deals with Apple and others don’t need to be exclusive, allowing Apple to partner with Bing. 🙃
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> If Apple thinks Google Search is the best for users, it could still offer it as the default. It just wouldn’t get the TAC.
I think what they’re saying is more like “getting 20 billion dollars each year for free allows us to offer better products at lower prices to the end user”
Cue’s arguments are really weak.
It would not be the first time Apple would divert resources and spend billions on a project. Let’s just call this search engine Apple’s Car2.
Also the point about IA is quite surprising for a company that claimed that the Titan fiasco was not a complete fiasco because the work in the IA field could be used in other fields. Or is it that it can only be used to generate pointless emojis?
If they are afraid that it is required to have a viable business to run a search engine, they can just apply their usual business model: tax every website they sent a user to. After all, these websites would be indirectly using Apple’s IPs (addresses) to get traffic.
The moral argument about targeted ads is laughable when you consider that’s what they are already doing on the App Stores.
It looks more like a child crying that it’s unfair that he is not being given a lot of money for no real reason.
Can't knock Apple for trying to keep the $20 billion it makes for literally doing nothing, but the notion that Google is the best search engine in existence these days is impossible to defend with a straight face.
The bigger news (unless this was already publicly known) is that in this filing Cue says the quiet part out loud and admits that Apple has revenue share agreements with the four other search engines they permit you to set as the default, and thus the reason Apple won't let you use a custom search engine in Safari is because that would make them less money. Their argument is that revenue share allows them to "create the best user experience possible" by providing users the default search engine most of them prefer, and yet here they are preventing users from selecting an alternative they like better because that would hurt services revenue.
Wow, had no idea what an absolute shitheel Cue is. It's not about what best served Apple or its users, but what best serves society at large.
Greedy bastard
TAC is Traffic Acquisitions Cost, the money (in this case) Google pays browser vendors to be the default.
Apple gets TAC from all the searches initiated from Safari, not just from the engine who probably pays more to be the default. Prelovac mentioned this on the Talk Show, which was recorded earlier, so I don’t think it’s recent news due to Cue.
What does IA stand for?
"...Also the point about IA is quite surprising for a company that claimed that the Titan fiasco was not a complete fiasco because the work in the IA field could be used in other fields. Or is it that it can only be used to generate pointless emojis?..."
