The $20 billion agreement between Apple and Google, which designates Google as the default search engine on iPhones, is facing increased scrutiny. As highlighted in our report earlier today, the U.S. Department of Justice is advancing its case against Google’s dominance in the search sector, with the lucrative Apple contract being a key point of focus.
This week, Eddy Cue, Apple’s Senior Vice President of Services, provided insights in a recent court filing, explaining why Apple has no intention of creating its own search engine.
Cue points out that the court seems to think that proposed remedies in the Google case could push Apple to “develop its own search engine or join the Search Text Ad market” to challenge Google’s dominance. However, Cue argues that this assumption is fundamentally flawed.
Here are Cue’s arguments for why Apple is unlikely to enter the search engine market:
- “Apple is concentrating on other growth opportunities. Developing a search engine would necessitate reallocating substantial capital and workforce, as the process would require billions of dollars and several years to complete.”
- “The search landscape is quickly changing due to advancements in Artificial Intelligence. This dynamic environment makes it economically unwise to commit the vast resources needed to build a new search engine.”
- “Creating a competitive search engine would entail establishing a platform for targeted advertising sales, which is outside Apple’s primary business focus. Apple lacks the quantity of specialized experts and the extensive operational infrastructure required to successfully manage a search advertising enterprise. While Apple engages in some niche advertising, such as on the App Store, search advertising diverges from Apple’s core competencies. Furthermore, launching a search advertising business would conflict with Apple’s longstanding privacy principles.”
Additionally, Reuters reported that Apple has expressed interest in participating in Google’s upcoming U.S. antitrust trial related to online search.
“Google can no longer sufficiently represent Apple’s interests: Google must now respond to a comprehensive initiative aimed at dismantling its business divisions,” Apple’s filing stated.
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