Apple’s Lucrative Deal with Google: 36% Revenue Share from Safari Searches Revealed in Antitrust Trial. In the ongoing antitrust lawsuit against Google, new details have emerged about its lucrative search engine arrangement with Apple. This information, revealed during a trial involving the US Department of Justice, sheds light on the financial dynamics between the two tech giants.
Bloomberg’s recent report highlights that Apple receives a significant 36% share of revenue from Google searches conducted on Safari across Apple devices like iPhones, iPads, and Macs. This detail, disclosed by an economics expert during the trial, unexpectedly became public, much to the discomfort of Google’s top legal representative.
Financial analysis from Bernstein last month estimated Apple’s earnings from this deal to be in the region of $18 billion to $20 billion annually, accounting for roughly 15% of Apple’s total operating profits each year.
Both Apple and Google have been keen to keep specifics of this deal under wraps, arguing that disclosure could compromise Google’s market competitiveness.
The relationship between Google and Apple dates back to 2002, with Google securing its spot as the default search engine on Apple’s widely used devices. This arrangement has been central to the legal scrutiny, with the Department of Justice investigating Google for potential monopolistic practices in the search engine market.
Microsoft’s Satya Nadella has voiced concerns about the deal’s impact on search engine competition, noting the habitual nature of Google searches for many users. He mentioned that altering these ingrained habits would require a change in default settings.
Interestingly, Microsoft had once proposed a deal to Apple for Bing, envisioning it as a potential Apple-branded search engine. However, concerns about Bing’s ability to rival Google’s performance and the substantial revenue from the Google deal dissuaded Apple.
During the trial, Apple’s Eddy Cue asserted that Google’s position as the default search engine is due to its perceived superiority. He mentioned that a lack of viable alternatives has cemented Google’s place in Apple’s ecosystem.
While Google remains the default, Apple device users do have the option to switch to other search engines such as Yahoo, Bing, DuckDuckGo, or Ecosia through Safari settings.
The outcome of the antitrust case against Google could have significant implications. If Google is found to be in violation, the existing Apple-Google agreement might be nullified, potentially leading to a setup where users select their preferred search engine during device setup.
Such a ruling could also propel Apple to develop its own search engine. The company has already shown interest in this area, with Apple’s AI head John Giannandrea overseeing a team that has developed an advanced search technology for Apple’s applications.
The resolution of this legal battle, however, is expected to take time, with a decision yet to be made and a likely lengthy appeals process to follow.
