Reports of an “Apple Search” rivaling Google have been quashed, as Apple asserts that its existing deal with Google better serves its users. Eddy Cue, Apple’s Senior Vice President of Services, is set to testify in a federal antitrust trial, affirming that “Apple Search” is not on the horizon due to the effectiveness of its partnership with Google.
Cue played a pivotal role in negotiating Apple’s multibillion-dollar deal with Google, a complex process that spanned four months of intensive daily negotiations.
The Significance of Cue’s Testimony
The U.S. Justice Department contends that Google’s agreement with Apple to be the default search engine on its devices has created an uneven playing field, hindering rival search engines from competing on a level footing. Cue’s testimony sheds light on the intricacies of Google’s relationship with Apple.
The Apple-Google Pact
Under the terms of their agreement, Google pays Apple approximately $10 billion annually to remain the default search engine on Apple devices. Additionally, Google shares advertising revenue with Apple, constituting one of its most substantial expenses. Apple categorizes this income from Google as advertising revenue within its services division, amounting to a staggering $78.1 billion in sales during Apple’s fiscal year 2022.
According to estimates by Bernstein analyst Toni Sacconaghi, Google’s payments to Apple could reach up to $19 billion in the current fiscal year.
Why Google Remains Apple’s Default Search Engine
Cue is expected to testify that Google was selected as Apple’s default search engine because it stands as the superior choice. He will also clarify that Apple maintains financial agreements with other search engines, including Yahoo, Microsoft Bing, DuckDuckGo, and Ecosia, in addition to Google.
Furthermore, Cue will highlight that Apple users with Google as their default search engine can easily change it, a point echoed by Google’s lead lawyer, John Schmidtlein.
However, DuckDuckGo’s Founder and CEO, Gabriel Weinberg, expressed concerns in court that switching default search engines is more challenging than necessary, often leading users back to Google if they take no action.
Testimonies and Google’s Defense
Eddy Cue is the second Apple executive to testify, following Apple AI head (and former Google executive) John Giannandrea. Giannandrea’s testimony mostly took place in a closed courtroom, with limited details available to the public.
Google’s defense hinges on the argument that its search dominance (with a 90% market share) stems from providing a superior product, rather than unfair financial arrangements favoring its rivals.
In contrast, Google emphasizes the inclusion of Microsoft’s Bing as the default search engine on the Windows operating system, which has not significantly improved Bing’s market position.
A Long History of Apple Search Speculation
Rumors of Apple entering the search arena have surfaced periodically, with suggestions of an Apple search engine emerging as recently as May 2022. While these speculations persist, it’s possible that Apple leverages them in negotiations with Google for more favorable financial terms. Nevertheless, it appears that the debut of an Apple search engine remains several years away, if it materializes at all.
Source: Search Engine Land
