Details about Apple default search deal shows how Google discourages competition

The U.S. Justice Department’s case against Google’s centers on its practice of spending billions of dollars a year to become the default search engine on browsers, smartphones, and other gadgets.

Google breakup. Image: Google logo

Mark Bergen, Gerrit De Vynck, and Mark Gurman for Bloomberg Businessweek:

Google is effectively paying to prevent the emergence of rivals, government officials have argued in recent regulatory filings. “Particularly on mobile devices, the current scale and breadth of payments by Google harms competition between search engines,” the U.K.’s antitrust regulator concluded in an investigation published in July.

For at least a decade, Google has been the default search engine on Apple’s iPhones, iPads, and the Mac’s Safari browser. Google is also used for some queries in Siri, Apple’s digital assistant. Eddy Cue, Apple’s services chief, has been the lead negotiator on these agreements, which in their current form are based on the two companies sharing the revenue coming from Google searches on Apple devices. Apple also gets a slice of revenue from searches made through some of Google’s own apps, such as Chrome, installed on iPhones, iPads, and Macs, according to a person familiar with the arrangement who asked not to be named discussing private business agreements.

The cooperation between Apple and Google is crucial for both companies. Apple gets as much as $12 billion a year from its deal with Google, accounting for about 4% of its overall revenue. Almost half of Google search traffic last year came from Apple devices, according to the Justice Department.

MacDailyNews Take: Actually, the deal sounds – and is – much more crucial for Google than for Apple. Without the deal, one company, Apple, would go merrily on its way with 96% of it’s overall revenue (which is growing) and the other company Google (Alphabet Inc.) would be decimated. Kill the deal, Apple.

Before the latest Google agreement was finalized around 2017, Apple was using Microsoft’s Bing as the search engine for Siri and some other queries on iPhones and iPads. Apple had internal discussions to consider staying with Bing and even making it the default for the Safari browser, the person said. Apple has also weighed launching its own search engine or customizing a licensed version from a provider such as Microsoft. It’s instead built closer ties to Google.

MacDailyNews Take: At this point, knowing that users employ search tens, if not hundreds of times per day, we’d remind Apple CEO Tim Cook of his own parroting of Apple co-founder Steve Jobs’ words:

I’ve always wanted to own and control the primary technology in everything we do.Steve Jobs, October 12, 2004

• In order to build the best products, you have to own the primary technologies. Steve felt that if Apple could do that — make great products and great tools for people — they in turn would do great things. He felt strongly that this would be his contribution to the world at large. We still very much believe that. That’s still the core of this company.Apple CEO Tim Cook, March 18, 2015

During initial set up, which each new device and major OS release, users should be presented with a list of search engines (where the engines would have a brief opportunity to extol their virtues; for example, DuckDuckGo could tout user privacy) from which to choose to set their default.

This would be a 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.

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%.

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

15 Comments

  1. “Almost half of Google search traffic last year came from Apple devices”

    So does anyone have any questions on how Apple should go “thermonuclear” on Google?

    Sheesh, Apple instantly hamstring Google’s monopoly on search while simultaneously putting a serious dent in their earnings.

    Why are they waiting?

    Apple pulling out of the search agreement would be a MUCH better solution than whatever the government comes up with.

    1. While Google may have reduced earnings if the deal is cancelled, based on the article claiming Apple not only gets $12B but also a share of the search revenue, the ‘dent’ may not be as thermonuclear as some may hope. Add to that the assumption that very few to no current Apple users will use Google that MDN appears to be making, which IMO is unrealistic, the ‘damage’ to Google seems pretty limited. The question is how deeply is Google search integrated into iOS backend processes/services (e.g. Siri) and whether that will make a difference to users should Apple decide to remove Google usage in those areas.

  2. Saying goodbye to a possible $12 billion/yr isn’t like flipping a switch. Though I’d love to see all things Google move to the background, few companies these days, including Apple, are willing to do such a thing because of the Wall St hit.

  3. That deal is what the EU should be looking at, it hurts all small/medium developers, also having Amazon, Facebook, Microsoft, and Google camp out in the App Store is also hurting the small to medium sized developers. Git them out let them do the hard work on their own.

  4. Saying this search deal hurts competition is just plain ignorant. This setting has always been adjustable and none of the devices force you to use Safari, which the setting covers. This is a generic business decision, which happens to affect users who are making a choice. If anything, this seems like regulators are just having issues with consumers making choices for themselves. Waste of time when there are actual issues happening with society.

    1. If anything happens to Apple (EU), the deal needs to go, if given a choice between running the Appstore as Apple sees fit or giving Google the boot across the board that is a easy choice. Apple doesn’t need Google or Facebook, their Ad empires go to sh_t on mobile without access to Apple’s ecosystem.

      Someone’s side gig (deal) is going to go bye bye….

    2. It is SO easy to switch search engines. I have been using DDG for many years.

      In my opinion, the default search setting really doesn’t matter. I also believe that many iOS users would choose to use Google, even if it was not the default.

    3. Unless something has changed with Apple’s policy of ALL web browsers being required to use Apple’s Webkit instead of their own rendering engines (e.g. Chrome on iOS) it could be strongly argued that you are ‘forced’ to use Safari.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.