Apple is not planning to create its own search engine to rival Google.
Eddy Cue, Apple’s Senior Vice President of Services, is expected to testify at the federal antitrust trial that there are no plans for an “Apple Search” model because its partnership with Google works better for its customers, reports Bloomberg.
Cue notably helped negotiate Apple’s multibillion-dollar deal with Google, which took four months “working every single day” to finalize.
Why we care. The U.S. Justice Department argues that Google’s deal with Apple to become the default search engine on its products has played a major role in creating an unfair search landscape as it’s prevented rival search engines from being able to compete seriously. The testimony from Cue, which Apple tried to block per Reuters, provides a significant insight into Google’s relationship with Apple.
Apple’s deal with Google. Google has a financial agreement in place with brands like Apple to be the default search engine on its products at a cost of around $10 billion a year. In addition, Google pays Apple advertising revenue – which is one of the search engine’s biggest costs.
Apple reports its income from Google as advertising revenue, which is categorized under its services division. This amounted to $78.1 billion in sales during Apple’s fiscal year 2022.
Google could pay Apple as much as $19 billion this fiscal year, according to an estimate from Bernstein analyst Toni Sacconaghi.
Why Google is Apple’s default search engine. Cue is expected to testify that Apple chose Google as the default search engine for its product because it is the best search engine. He will also state that Apple has financial deals with other search engines such as Yahoo, Microsoft Bing, DuckDuckGo and Ecosia, as well as Google. In addition, Cue is set to claim that Apple customers with Google as their default search engine can easily change it, echoing comments made by Google’s lawyer, John Schmidtlein.
However, DuckDuckGo founder and CEO Gabriel Weinberg told the court last week that changing a default search engine is “way harder than it needs to be.” He said:
- “If you switch some of these defaults eventually you’re just going to be switched back to Google if you do nothing.”
Who else has testified? Cue will be the scond executive from Apple to testify, following pple AI head (and former Google executive) John Giannandrea last week. However, the majority of Giannandrea’s testimony was given in a closed courtroom and so the details and not publicly available.
What has Google said? John Schmidtlein, lead lawyer for Google, claims the company dominates the search market with a 90% share because it is a superior product – not because it has financial deals that give its rivals an unfair advantage. In contrast, it highlights the default inclusion of Microsoft's Bing on the Windows operating system, which has not significantly helped Bing's market position.
Deep dive. Read our Google antitrust trial updates for all the latest developments in this landmark case.
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