Class-Action Suit Alleges Google Pays Apple to Ensure Apple Search Isn’t a Thing

BY Chandraveer Mathur

Published 5 Jan 2022

Apple Google Collaboration

A class-action lawsuit filed at a California court earlier this week alleges that Google and Apple have a mutual non-competition agreement. The former pays an annual fee, so the iPhone maker doesn’t develop a search engine, and Google remains the default search engine for Safari users.

The complaint filed against Google CEO Sundar Pichai and Apple CEO Tim Cook claims that the non-compete agreement between the Big Tech giants violates US antitrust laws. The plaint specifically accuses the CEOs of convening for “regular secret meetings” where Google agrees to share profits with Apple in exchange for the preferential treatment on Safari for iPhone and iPad.

The lawsuit states that Google’s regular payments also ensure Apple doesn’t develop a rival search engine. The mutual agreement is also said to include clauses dictating active suppression of small competitors and acquisition of potential rivals. Thirdly, the complaint states that the cost of advertising is higher than it would be in a fair, competitive market. Bringing the lawsuit to a San Francisco court this week, lawyer Joseph M Alioto said:

“These powerful companies abused their size by unlawfully foreclosing and monopolizing major markets which 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.”

So, the lawsuit seeks an injunction that quells the Apple-Google non-compete agreement, stops Google’s profit-sharing and special treatment, and end payments running into several billion dollars. The complaint also seeks the following:

“The breakup of Google into separate and independent companies and the breakup of Apple into separate and independent companies in accordance with the precedent of the breakup of Standard Oil company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others.”

Although it is widely known that Google pays Apple to be the default search engine for Safari, the exact amount is unknown. A report from 2020 claimed that Apple gets around $8-12 billion annually for the favor, while another analyst contended that in 2021, Google upped the payment to $15 billion. Rumor has it that Google doesn’t pay any other entity such a large sum, and it accounts for a fifth of Apple’s profit each year.

Our Take

If you aren’t aware, Apple is already in the search engine business with an active web crawler called Applebot that improves Siri and Spotlight search results behind the scenes. The company could use this in its defense. However, other reports have interpreted increased Applebot activity as a sign of Apple preparing to make its own search engine, should the anti-competition deal fall apart.

Apple and the search giant could also argue that although Google is the default search engine on Safari, users are free to change the default and use an alternative like Microsoft’s Bing, Verizon’s Yahoo, and DuckDuckGo.

The Apple-Google agreement has been investigated in the past, but do you think this lawsuit will successfully break the companies’ embrace? Tell us in the comments below.

[Via Alioto Law Firm]