The U.S. DOJ antitrust lawsuit is targeting Google’s multibillion-dollar default search pact with Apple.
Mark Gurman for Bloomberg News:
The Justice Department’s lawsuit, filed Tuesday, targets paid deals Google negotiates to get its search engine to be the default on browsers, phones and other devices. The biggest of these is an agreement that makes Google search the default on iPhones and other Apple devices.
The U.S. government said Apple Chief Executive Officer Tim Cook and Google CEO Sundar Pichai met in 2018 to discuss the deal. After that, an unidentified senior Apple employee wrote to a Google counterpart that “our vision is that we work as if we are one company.”
The DOJ also cited internal Google documents that call the Apple search deal a “significant revenue channel” for the search giant and one that, if lost, would result in a “Code Red” scenario. That’s because nearly half of Google search traffic in 2019 came from Apple products, according to the lawsuit.
The Justice Department focused in particular on the deal between Apple and Google, saying it “substantially forecloses Google’s search rivals from an important distribution channel for a significant, multi-year term.”
Google pays Apple billions of dollars a year to make its search product the default option, according to analyst estimates. That means when a user buys a new iPhone or other Apple device, the built-in search engine in the Safari browser is Google. Apple users have the option to manually switch to Microsoft Corp.’s Bing, Yahoo Search or DuckDuckGo, but “few people do, making Google the de facto exclusive search engine” on Apple devices, according to the DOJ.
The DOJ suit cited estimates that Apple gets $8 billion to $12 billion annually from Google through the agreement.
MacDailyNews Take: Kill the deal, Apple.
Not because there’s anything illegal with it, but because Apple’s doesn’t need the money and because Google, who largely stole iOS’s look and feel (however poorly), is clearly nobody’s friend, certainly not Apple’s.
Perhaps Apple see this deal as some sort of payback for Google’s blatant Android theft. Regardless, kill the deal, Apple.
Apple killing the default search deal will kneecap Google and induce competition into the search and advertising markets. It’s a win-win!
Why does Google pay Apple billions of dollars annually to be Safari’s default search engine? Because Apple has the best customers in the world and Google’s Android doesn’t. Google needs access to discerning people with means because they simply don’t have it with the great unwashed who settle for IP- and privacy-trampling iPhone knockoffs. — MacDailyNews, February 12, 2019
Android is pushed to users who are, in general:
a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.
Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong.
Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth. – MacDailyNews, November 26, 2012
“All men are created equal.”
Well, not when it comes to users of smartphones and tablets…
The bottom line: Those who settle for Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android settlers to developers, advertisers, third-party accessory makers (speakers, cases, chargers, cables, etc.), vehicle makers, musicians, TV show producers, movie producers, book authors, carriers, retailers, podcasters… The list goes on and on.
The quality of the customer matters. A lot.
Facile “analyses” that look only at market (unit) share, equating one Android settler to one iOS user, make a fatal error by incorrectly equating users of each platform one-to-one.
When it comes to mobile operating systems, all users are simply not equal. – SteveJack, MacDailyNews, November 15, 2014
Kill the deal and set the default to what? Apple customers aren’t changing the default search engine not because they don’t know how, but because they think Google is currently the best. The ‘creme of the crop’ customers using the iPhone are the exact same customers who 1)know that Google is the best search engine and 2)also would know how to change the settings to set Google back as the default. Which I suspect would result in Google still garnering a huge percentage of Apple user eyeballs, and then not paying Apple a dime. I agree with most MDN suggestions, but in this case, I think ‘killing the deal’ would just result in Apple foregoing $ billions for no net benefit. My 2 cents.
During initial set up, which each new device and major OS release, users are presented with a list of search engines (where they may perhaps have a brief opportunity to extol their virtues; for example, DuckDuckGo could tout user privacy) from which to choose to set their default.
This is the likely remedy as it gives users a choice upfront, instead of baking it in and burying it in Settings / Preferences where a large percentage of users never venture.
And my point is, who among us is going to choose anything other than Google? Google would laugh all the way to the bank after reaping the rewards of our continued use of their engine, without having to pay Apple any $. Within 5 minutes of any announcement that Apple was switching default search engines, there would be an article on every major Mac site, including MDN, about how to switch to or back to Google. In this singular case, I suspect Google is foolish to pay the Apple tax, as most of us would revert to Google on our own.
Using the Microsoft antitrust case as our guide, Microsoft was forced to unbundle Internet Explorer from Windows. The case was settled on November 2, 2001.
“Well, who would choose anything other than the market-leading Internet Explorer?” you might have asked at the time, as many did.
Of course, it often takes years for change to happen, but change does happen.
In June 2004, IE usage share peaked at 96%.
In 2010, the European Commission forced Microsoft to offer a choice of web browsers upfront to users.
Today, Chrome has 65% share of web browsers, Safari has 18%, and IE/Edge has under 5%.
The big difference here is that the Chrome browser has never been (outside of chromebooks) integrated with any OS. People chose Chrome in contrast to IE which you had no choice but use if you used Windows before the unbundling. You could have other browsers at that point but any file explorer related library would be using IE.
No iOS default you (the user) type it in within Safari doubt it, no Google, Facebook, Microsoft, or Amazon apps within the App store or in any sort default position equal more opportunity for smaller developers.
Interesting line of thought. Looking at it from a different angle, if Google knows that the ‘creme of the crop’ will default to their search engine, then why still pay Apple?
They won’t, but more importantly someone else might try and write a new search engine.
I imagine it’s to ‘catch’ all the users that don’t really care to change the ‘default’. The question is how will changing the default affect Siri (among other Apple services) which uses Google search in the back end.
Give DuckDuckGo a try. After an initial adjustment to a different look you will grow to love it for its simplicity, privacy and lack of advertising. Used to be that Google Search was clearly the best, but not sure that advantage is clear cut anymore.
Hate to see Apple give up Google’s penalty fee for copying the iPhone, but the more I think about it, the more I realize how conditioned people are to think Google Search is best when there are other options that are as or more attractive.
Apple Search Engine
It’s been proposed by some (myself included) and rumor by others for nearly 5 years now. There is more circumstantial evidence recently with new hires at Apple specializing in search and furious rollouts of Applebot in recent months. It’s time for Apple to combine Siri and Spotlight into a new form of global search engine focused on privacy and not driven by ads, imagine the ramifications to consumers, search engine rankings, and ad agencies. Let the disruption begin.
There are people saying how the lawsuit could hurt Apple’s valuation, but meanwhile Google’s share price is soaring. I wonder why Google investors aren’t concerned, at all. Is it possible that Google investors aren’t scared as easily as Apple investors? I’m thinking Google investors don’t think the Department of Justice can harm Google. The Feds certainly weren’t able to do anything to harm Facebook’s value.
If Apple weren’t so desperate to get Google’s money, Apple should have acquired DuckDuckGo and used that as the default search engine. Apple has the money to build out DuckDuckGo into a powerful search engine if it really wanted to.
LOL, if Apple bought DDG and built it out, then the other search engines would complain to the EU, that Apple is favoring its own search engine.
Well, what if Microsoft’s Bing paid Apple $5B to be the default search engine, would the DOJ go after Microsoft? Product placement is the norm in many industries. Products pay to get shelf space in your grocery store. Totally legal.
I think as MDN webmaster proposed, Apple should have a step in initial setup that asked what you want for your default search, would settle things. I believe Google’s settlement with the EU several years ago for PC browsers was basically just that; asking users what they want for the default search engine.
Simple.