What you should know
- Google pays Apple 36% of the revenue it collects from search advertising via the Safari browser
- Google Search is the default search engine on the iPhone
- Google wants to keep the revenue sharing figure with Apple secret to prevent other manufacturers from renegotiating their deals with Google
- The revenue sharing agreement between Apple and Google is being used as evidence in the antitrust trial
Full Story
Blog:
Information from the U.S. v. Google antitrust trial has revealed several details surrounding Google’s revenue sharing with Apple and other companies. During the trial, University of Chicago professor Kevin Murphy disclosed that Google pays Apple 36% of the revenue it collects from search advertising on the Safari browser. This figure was previously unknown to the public and the reaction from Google’s main litigator, John Schmidtlein, suggested the company wanted to keep this information under wraps.
Google’s desire to keep this figure confidential is practical, as other manufacturers like Samsung could use it as leverage to renegotiate their own deals with Google. The company argued to the court that releasing information about its deal with Apple “would unreasonably undermine Google’s competitive standing.” The revenue sharing agreement between Apple and Google dates back to 2002 and is integral to Google’s deals with hardware manufacturers, as it makes Google the default search engine on the iPhone. However, this has been presented by the Justice Department as evidence of Google’s anti-competitive practices in preventing other search engines from becoming the default option on tech devices.
The outcome of the antitrust trial could have significant implications for Google, as the DOJ may demand the company to be broken apart into different business units if it is proven to be anti-competitive in search.
