According to a recent court filing by Google, the iPhone and iPad might employ different default search engines as the company seeks to safeguard its annual $20 billion agreement with Apple.
The deal that sees Google paying Apple to be the default search engine in Safari faces potential ban under antitrust regulations. In response, Google is proposing several countermeasures…
Google’s Annual Payment to Apple Exceeds $20 Billion
When a user performs a search through the integrated Safari bar without changing the default settings, that search is conducted via Google. This arrangement exists due to Google’s substantial annual payment to Apple.
This payment is advantageous for Google, as it leverages significant search traffic from Apple users, providing an opportunity to show ads to a desirable audience. Apple customers represent a particularly lucrative demographic due to their generally higher incomes.
For Apple, this arrangement is essentially “free money.” The company needs to establish a default search engine, and since Google is the most recognized option, it seems a logical choice.
The precise figure of this payment remains undisclosed; Apple includes it within its Services revenue. However, a recent antitrust suit against Google inadvertently revealed that the payment for 2022 was $20 billion.
The Department of Justice claimed that this financial arrangement is illegal, as it unfairly favors Google over smaller search engines, and a court corroborated this argument during the summer. The DOJ has requested a prohibition of this payment for a decade.
Google’s Counterproposal Regarding Default Search Engines
During the legal proceedings, Google presented a counterproposal in response to the DOJ’s stance.
While Google acknowledges that its agreement with Apple will likely be invalidated, it argues that the duration of the ban should be reduced to three years instead of ten. The company cites the rapidly evolving nature of the tech industry, particularly with advancements in generative AI, suggesting that current dominance doesn’t guarantee future success.
iPhone and iPad Could Use Distinct Search Engines
Additionally, Google posits that introducing more flexibility could enhance competition among search services for Apple’s business. In a notably strange proposal, it suggests that the iPhone and iPad could utilize different default search engines, implying a bidding war between Google and its competitors.
Our proposal allows browsers to continue offering Google Search to their users and generating revenue from that partnership. It would also provide additional flexibility: enabling multiple default agreements for various platforms (e.g., distinct default search engines for iPhones and iPads) and browsing modes, with the option to alter the default search provider at least once a year.
DMN’s Perspective
While Google currently holds a significant portion of the search market, its assertion that this dominance may not be permanent stands on solid ground. We’ve witnessed a shift in user behavior with AI services like ChatGPT emerging as alternatives to traditional search engines, making future dynamics unpredictable.
Take Nokia’s decline as an example: prior to the advent of the iPhone, Nokia dominated the smartphone sector, and it seemed inconceivable that the company could retreat from that space. Yet, just seven years later, Nokia exited the smartphone industry entirely. Thus, despite Google’s current stronghold, its future trajectory remains uncertain.
In theory, more nuanced default search arrangements could provide an opportunity for rival search engines to vie for business. However, it is essential to acknowledge that Apple prioritizes delivering a cohesive experience across its devices, which makes the prospect of negotiating different search engines for iPhones and iPads somewhat impractical.
A compromise could emerge from the court’s judgment, with Google possibly succeeding in shortening the proposed ten-year ban. Nonetheless, for the foreseeable future, Apple is likely to see a decrease of $20 billion annually.
Photo by Brandon Romanchuk on Unsplash
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