Apple receives a total revenue of 36% of Google’s ad revenue from Safari, as per the terms of their search default agreement.
This was reported by an Alphabet witness on Monday, November 13, in court during the antitrust dispute between Google and the Department of Justice (DoJ).
This can only be seen as the best way to illustrate how profitable Google’s search deal has been for Apple and the search engine parent, which was previously unknown to the public. Citing possible anticompetitive effects, both companies have fought to restrict the disclosure of the deals’ specifics during the Google antitrust trial – initiated in mid–September of the current year.
What Happened Next
It was unexpected that Alphabet’s expert witness, University of Chicago economics professor Kevin Murphy, would make this incidental disclosure. Murphy’s testimony was given as part of the company’s defense against accusations by the DoJ that it maintains illegal dominance over the search and advertising markets.
When Murphy disclosed the figure, antitrust partner John Schmidtlein of Williams & Connolly appeared to cringe visibly, according to Bloomberg News.
The proceedings are primarily focused on the search default agreement. The Apple-Google agreement has been referred to as the “heart” of the case by Judge Amit Mehta. Wall Street also keeps an eye on this figure. In a note to clients, Bernstein analyst Toni Sacconaghi projected that Apple would earn $19 billion in 2023 from the search engine default agreement with Google.
Google said it would not comment on Sacconaghi’s statement. Apple did not respond to a request for comment immediately.
Alphabet’s Search Engine Agreements
In his testimony during the proceedings, Alphabet CEO Sundar Pichai supported these kinds of agreements. However, Google’s rivals have stated that the agreement is bad for their business. In his October testimony, Microsoft CEO Satya Nadella, for instance, provided details.
Even though it would have resulted in billions of dollars in short-term losses, Nadella claimed that he had “dialogues” with Apple over a default search engine deal for Microsoft’s Bing “every year” he had held the top job at Microsoft. As of now, Nadella stated, nothing had come of those discussions.
According to Microsoft’s CEO, the term “open web” is misleading, remarking on the stand that “everybody talks about the open web, but there is actually the Google web.”
Our World Revolves Around Google
One cannot say that Google is not one of the most, if not the most, powerfully successful search engines in the world, with several factors making it unique. For starters, Google is user-friendly; the colors make it extremely relaxing for the user to want to visit the page again, and we as humans tend to stick to what we are familiar with. Other factors that make people want to stick to Google are features such as Google Maps, reviews on places, Gmail, and the accuracy in research.
This might be a reason why Apple agreed to have Google as a default search engine, other than the financial reasons. The issue is not whether we are wrong for using Google while being aware of the ongoing issues, or if Google itself is the issue. Maybe the issue is a two-way one?
Even though everyone is aware of Google’s activities, Google will always be the default search engine regardless of what Apple or Google do.
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