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Google Basically Pays Apple To Stay Out Of The Search Engine Business

Google Is Paying Apple to stay away from developing its own search engine

Philip Aladino

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Google Basically Pays Apple To Stay Out

Highlights

  • According to a new class-action lawsuit, Apple has an agreement with Google that it will not build its internet search engine as long as Google pays it to be the default choice in Safari.
  • The case, filed earlier this week in a California court against Apple, Google, and their respective CEOs, claims the two firms have a non-compete agreement in the internet search sector that violates US antitrust rules.
  • This is thought to be Google’s single largest payment to anybody, and it might account for up to a fifth of Apple’s yearly revenues.
  • It has already obtained criticism, particularly from the US Justice Department, which believes that the agreement is an example of unlawful measures used to safeguard Google’s monopoly and suppress competition.

According to a new class-action lawsuit, Apple has an agreement with Google that it will not build its internet search engine as long as Google pays it to be the default choice in Safari.

The case, filed earlier this week in a California court against Apple, Google, and their respective CEOs, claims the two firms have a non-compete agreement in the internet search sector that violates US antitrust rules.

The lawsuit accuses Apple CEO Tim Cook and Google CEO Sundar Pichai of holding “frequent covert meetings” in which Google agrees to split earnings with Apple in exchange for preferential treatment on products such as the iPhone and iPad.

The class action also claims that Google pays Apple yearly multibillion-dollar payments in exchange for Apple not launching its rival search engine and that the non-compete agreement includes intentions to deliberately discourage smaller competitors as well as purchase real and future competitors.

Google And Apple Report

According to the lawsuit, advertising charges are now higher than they would be in a competitive system. As a result, it wants an injunction barring Google and Apple from entering into a non-compete agreement, the termination of the profit-sharing arrangement and preferential treatment, and the stoppage of the multibillion-dollar payments.

Finally, the lawsuit requests that “Google and Apple be divided up into separate and independent firms, following the precedent of the division of Standard Oil company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others.”

It’s no secret that Apple and Google have a substantial financial deal that maintains Google’s status as the default search engine on Apple products. Neither business has ever revealed how much Google pays to be the default search engine for Apple devices in the United States, the United Kingdom, and other countries, but it’s said to be in the billions of dollars.

According to The New York Times, Apple would earn an estimated $8-12 billion each year in return for making Google the default search engine on its iPhones by 2020. One analyst stated that Google’s payment to Apple in 2021 to preserve the status quo may be as high as $15 billion.

This is thought to be Google’s single largest payment to anybody, and it might account for up to a fifth of Apple’s yearly revenues. However, it has already obtained criticism, particularly from the US Justice Department, which believes that the agreement is an example of unlawful measures used to safeguard Google’s monopoly and suppress competition.

The UK Competition and Markets Authority has also called the agreement a “significant barrier to entry and expansion” for rivals in the search engine market and has requested that enforcement authorities be given a range of options to address the deal between Apple and Google to provide a more level playing field for other search engines by 2020.

“These powerful companies abused their size by unlawfully foreclosing and monopolizing major markets that, in an otherwise free enterprise system, would have created jobs, lowered prices, increased production, added new competitors, encouraged innovations, and increased the quality of services in the digital age,” said lawyer Joseph M Alioto, who brought the antitrust case to a San Francisco court this week.

Apple and Google would very certainly claim that, although the payments are for Google to be the default search engine, users may choose alternative search engines in Safari, such as Microsoft’s Bing, Verizon’s Yahoo, and independent search engines DuckDuckGo and Ecosia.

Apple would also likely point out that it is already in the search engine business, with an operational web crawler known as Applebot. Although the crawler primarily works in the background to improve Siri and Spotlight search results, previous reports have interpreted Applebot’s increased activity as Apple “stepping up efforts” to develop its search technology if its agreement with Google becomes incompatible with antitrust laws.

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Dino is a Tech Consultant. Entrepreneur, Website/Blog Developer, Graphic Designer, Blogger and Digital Marketer, he has long been freelancing for more than 6 years before starting up Smartcoretech, during this time was writing for websites like Opera News Hub, Paulworkspace, thescoove.africa etc. He is currently reporting on tech related contents on company's such as Apple, Google, Microsoft, Xiaomi, Facebook, Twitter etc. He also writes on Phone Reviews and Movies. When he is not writing he is working as an IT Manager for a company in his Local. Feel free to contact him via any of the available channels present

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