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This article was published on January 5, 2022

Google is paying Apple to stay out of the search business, lawsuit claims

When foes become friends

Google is paying Apple to stay out of the search business, lawsuit claims
Thomas Macaulay
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Thomas Macaulay

Writer at Neural by TNW — Thomas covers AI in all its iterations. Likes Werner Herzog films and Arsenal FC. Writer at Neural by TNW — Thomas covers AI in all its iterations. Likes Werner Herzog films and Arsenal FC.

Google and Apple are the best of frenemies. While the tech giants threaten “thermonuclear wars” over smartphone conflicts, they also quietly declare ceasefires for good causes — and big profits.

A prominent example of these truces is on the search battlefield. Google pays Apple big bucks to remain the default search engine on iOS devices — $8 billion to $12 billion a year, according to the US Justice Department.

A new lawsuit has shone the spotlight on this mutual-defense treaty. The antitrust case alleges that Google, Apple, and their respective CEOs have violated US antitrust laws in their non-compete agreement.

The complaint claims that the companies agreed that Apple wouldn’t develop its own search engine to compete with Google’s. In exchange, the Big G would give a share of its search profits — and billions of extra dollars — to the iPhone-maker.

According to the filing, Apple also agreed to make Google the only search engine that’s automatically included in all the Cupertino firm’s devices.

This arrangement allegedly gave Google “a substantial and unfair anti-competitive advantage over other search providers” including Yahoo!, DuckDuckGo, and Bing — while also eliminating Apple as a potential rival. The suit claims these agreements were made during “private, secret, and clandestine personal meetings” — some of which were caught on camera.

The plaintiff, the California Crane School, claims that the rates it pays for advertising on Google have been inflated by the “conspiracy.” It’s called — somewhat optimistically — for an end to the agreement and for the companies to be broken up.

That sounds like wishful thinking. If the search deal is a secret, it’s not exactly a well-kept one. Google has openly defended the arrangement with Apple, which it says isn’t exclusive, has passed antitrust reviews, and allows users to choose a different default search engine. Apple has also acknowledged the deal with Google.

“Their search engine is the best,” Apple CEO Tim Cook told Axios on HBO in 2018.

These arguments haven’t repelled criticism of the partnership, however.

In addition to the new complaint, the deal is at the heart of a lawsuit filed by US Justice Department. The DOJ alleges that Google has “unlawfully maintained monopolies in search and search advertising.”

The search treatise between the rivals is certainly mutually beneficial.

Apple gets up to 20% of its $260 billion of worldwide income from the partnership with Google, according to US government documents reviewed by NPR in 2020. Google, meanwhile, gets nearly half of its search traffic from Apple devices.

Indeed, the relationship is so important that a senior Apple employee told a Google counterpart that “our vision is that we work as if we are one company,” the DOJ said in its suit.

While the lawsuits rumble on, it’s heartening to know that even bitter enemies can put aside their differences for the greater good. And by “good,” I of course mean “profit.”

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