Google pays a fortune for being the default search engine of the iPhone. U.S. Department of Justice finally took Google to court on October 21st for abuse of dominant position in the search engine sector. Google has already been fined more than 4 billion euros in Europe for abuse of a dominant position and now Google is preparing for what could surpass the trial that Microsoft already suffered almost two decades ago.
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Google is the default search engine for the iPhone and has been for many years. In fact, both Google and Apple renewed the agreement in 2017 and now, as a result of the trial Google is undergoing, some points related to the agreement are starting to come out. This agreement is among the cases explained by the U.S. Department of Justice to demonstrate this abuse of dominant position.
Google would be paying between 8 and 12 billion dollars to Apple to be the default search engine on the iPhone. This agreement is part of what prosecutors in the case against Google consider illegal tactics to stifle their competition. Of course, having this economic power is not within everyone’s reach.
The U.S. Department of Justice says that almost half of Google’s traffic comes from Apple devices and considering that, the possibility of losing this deal with Apple would be terrifying for Google. Its business model of selling advertising effectively pivots on its search traffic. But beware, because even though the trial is against Google, prosecutors are putting Apple on the spot.
Apple would be criticized for facilitating this anti-competitive behavior to Google, because although both companies are effective competitors, a senior Apple executive even stated in 2018 that “our vision is that we work as if we were one company”, talking precisely about the agreement with Google in the search engine.
The possible breakup of Google and Apple could lead Apple to develop its own search engine for its devices. Or even decide to acquire an existing one to enhance it. We will see what happens.
