The US Department of Justice is currently taking steps to break up Google over its monopoly in the search engine space. One of the suggested remedies include divesting Google’s chrome browser and Android operating system which have made Google the dominant search engine option for majority of internet users.
Besides being the default search engine on their own browser, Google currently has revenue-share agreements with various device makers including Apple and Samsung to make Google Search the default search engine out of the box. One of the proposed solutions to counter anti-competitive behaviour is to force Google to cease these revenue-sharing contracts.
Apple wants to step in the antitrust trial as it couldn’t rely solely on Google to defend their current revenue-sharing agreements which has provided substantial contribution in revenue to the Cupertino giant.
Apple received almost RM100 billion from Google in 2022
Apple has confirmed that it received roughly USD 20 billion (about RM93 billion) in 2022 from Google in exchange for distributing Google Search on their devices. The company receives a cut of revenue generated from Apple’s user search queries.
Meanwhile, Samsung was reported to have received USD 8 billion (about RM35 billion) over four years from Google for making Google Search, Voice Assistant and Play Store default on their mobile devices.
Besides Google, the Apple also has existing revenue sharing agreements with other search engines which includes Yahoo!, Microsoft Bing, DuckDuckGo or Ecosia.
Apple emphasised that it is focused on creating the best user experience possible which is enabled through potential partnerships and arrangements with other companies. It added that if the suggested remedies were implemented, it would hamper Apple’s ability to deliver products that best serve its users’ needs.
Eddy Cue, the SVP of Services at Apple, shared that if Google is prohibited from sharing revenue for search distribution, Apple would then be left with two unacceptable options.
First, it would allow US users to choose Google as their search engine for Safari but Apple won’t receive any share of revenue which means that Google will be getting valuable access to Apple’s users for free. The second option is where Apple would remove Google Search as a choice on Safari but the move would eventually harm both Apple and its customers as customers would prefer to use Google.
Apple explains why it won’t build its own Search Engine
Apple has countered suggestions that the Cupertino tech giant would develop its own search engine or enter the Search Ad market. According to Eddy in a legal declaration, Apple has decided not to develop and it is unlikely to create their own search engine in the future due to several reasons.
The first reason is that Apple is focused on other growth areas. It said that the development of a new search engine would require diverting both capital investment and employees, as building a new search engine would cost billions of dollars and years of development.
Secondly, search is rapidly evolving due to the latest developments in Artificial Intelligence. As a result, it would be economically risky for Apple to devote huge resources required to create a search engine.
Thirdly, a viable search engine business will require a platform to sell targeted advertising which isn’t a core business of Apple. The tech giant elaborated that they currently do not have the volume of specialised professionals and significant operational infrastructure to build and run a successful search advertising business.
It added that while Apple has some niche advertising such as on the Apple App Store, they elaborated that search advertising is different and outside of Apple’s core expertise. It also emphasised that building a search advertising business would also need to be balanced against Apple’s privacy commitments.
