Apple, Google worked as ‘one company’ on search deal, US says

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A secretive, multibillion-dollar deal between Google and Apple.

The Justice Department’s lawsuit, filed Oct 20, 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 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”. The DOJ suit cited estimates that Apple gets US$8bil to US$12bil annually from Google through the agreement. Apple’s income from the search deal is believed to be part of the company’s growing Services segment, a key metric Apple has highlighted to investors and analysts in recent years.

 

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