Class action lawsuit alleges Google pays Apple to stay out of the search engine market
A class-action antitrust case has been filed that claims Apple and Google have violated U.S. antitrust laws in how they deal with each other, up to and including the payments that keeps Google's search engine as default on Apple products.
The complaint claims that Google and Apple have agreed that Apple would forego developing its own search engine to avoid competing with Google.
It also alleges that there has been a secret agreement that Google would share its search profits with Apple, and that Apple would give preferential treatment to Google on all Apple devices. By doing so, both companies are alleged to have worked together to suppress the competition of smaller competitors, effectively pushing them out of the search engine market. It also claims because of the alleged collusion, advertising rates are higher than in a competitive system.
The complaint states that these agreements were made in regular secret meetings between Apple and Google executives.
The lawsuit seeks the disgorgement of the billion-dollar payments of Google to Apple. It also seeks an injunction prohibiting the non-compete agreement between Google and Apple, the profit-sharing agreement, the preferential treatment for Google on Apple devices, and the alleged payment from Google to Apple.
Lastly, the plaintiffs are asking for the breakup of both Google and Apple into "separate and independent companies in accordance with the precedent of the breakup of Standard Oil company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others."
The Standard Oil comparison is questionable. At the time of the lawsuit under the Sherman Antitrust Act, it controlled 91% of oil production and about 84% of final oil and oil product sales in the United States. Apple has less than 50% of the mobile market in the U.S., and less than 10% of the computing market.
There have only been a few documented meetings between the CEOs of Apple and Google in person in the last decade. Additionally, both Google and Apple say that the payments for Google to be the standard search engine on iOS are just for that, and users can select other engines if they prefer.
Furthermore, contrary to the suit's claims, Apple has its own advertising business that it uses in the App Store. It also has its own Internet search engine that it uses for Siri and Spotlight Searches -- just not a web-accessible one.
Read on AppleInsider
The complaint claims that Google and Apple have agreed that Apple would forego developing its own search engine to avoid competing with Google.
It also alleges that there has been a secret agreement that Google would share its search profits with Apple, and that Apple would give preferential treatment to Google on all Apple devices. By doing so, both companies are alleged to have worked together to suppress the competition of smaller competitors, effectively pushing them out of the search engine market. It also claims because of the alleged collusion, advertising rates are higher than in a competitive system.
The complaint states that these agreements were made in regular secret meetings between Apple and Google executives.
The lawsuit seeks the disgorgement of the billion-dollar payments of Google to Apple. It also seeks an injunction prohibiting the non-compete agreement between Google and Apple, the profit-sharing agreement, the preferential treatment for Google on Apple devices, and the alleged payment from Google to Apple.
Lastly, the plaintiffs are asking for the breakup of both Google and Apple into "separate and independent companies in accordance with the precedent of the breakup of Standard Oil company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others."
The Standard Oil comparison is questionable. At the time of the lawsuit under the Sherman Antitrust Act, it controlled 91% of oil production and about 84% of final oil and oil product sales in the United States. Apple has less than 50% of the mobile market in the U.S., and less than 10% of the computing market.
There have only been a few documented meetings between the CEOs of Apple and Google in person in the last decade. Additionally, both Google and Apple say that the payments for Google to be the standard search engine on iOS are just for that, and users can select other engines if they prefer.
Furthermore, contrary to the suit's claims, Apple has its own advertising business that it uses in the App Store. It also has its own Internet search engine that it uses for Siri and Spotlight Searches -- just not a web-accessible one.
Read on AppleInsider
Comments
Not sure how they can prove the existence of any "non-compete" agreement. Apple has their own office suite to compete with Google Docs, has iCloud to compete with Google Drive, has their own Maps app to compete with Google Maps, the list goes on and on. Plus the advertising and search tools mentioned in the article.
Someone someday might make an argument for the breakup of Google and Apple. But these aren't the people, this isn't the justification, and that day isn't any time soon.
This is going nowhere.
ORRRRR, Apple can just default to whatever they want and continue to give the user the option to change to whatever they want after initial setup. If the user can’t figure out how to change the default, then they likely don’t care enough to change it in the first place. Unless of course the user is a lawyer trying to cash in.
On the subject of whether it is 'anticompetitive' to pay for the right to have your search engines as default options, I think the EU might raise its collective eyebrow for situations where simple financial clout may put competitors at a disadvantage but someone would have to lodge a formal complaint on this specific issue and proof is the question again.
Because, I think Apple have enough of these BS lawsuit and it is time to sue back.
Vexatious litigation is a good way to get disbarred. IANAL etc.
But a secret agreement to not develop a search engine? So now Apple is being sued for not developing a product???
This proves the point that we are living in an era of unbridled stupidity.
What difference does it make whether that deal was made in a "secret meeting" or out in the open? There is nothing anti-competetiv about holding "secret" meetings, even if the meetings were between competitors. What might be anti-competitive is the result of those "secret" meetings.
How about this? Google is paying FireFox for using Google as their default search engine. And have been in one form or another, for quite awhile.
https://www.androidheadlines.com/2020/08/mozilla-firefox-google-search
No secret deal there. Plus FireFox has about twice the browser market share of Safari.
https://netmarketshare.com/browser-market-share.aspx?options={"filter":{"$and":[{"deviceType":{"$in":["Desktop/laptop"]}}]},"dateLabel":"Trend","attributes":"share","group":"browser","sort":{"share":-1},"id":"browsersDesktop","dateInterval":"Monthly","dateStart":"2019-11","dateEnd":"2020-10","segments":"-1000"}
If the EU don't see that deal as being anti-competitive, how can they see the Apple-Google default search engine deal as being anti-competitive? Because it might have been made in a secret meeting? Oh yeah! The EU is not interested in FireFox. Firefox is not one of the big 5 US techs. FireFox can not be milked for hundreds of millions of dollars in taxes and fines.
Under current ant-trust laws, one can not (or at least should not) be charged with being anti-competitive when making a deal with someone that is not a competitor. Apple do not have an internet search engine that competes with Google. Apple market share in internet search engines is essentially ..... ZERO. Is Apple being anti-competitive by not having or wanting to invest in having, their own search engine? Is Apple being anti-competitive because they choose to use Google for their default search engine, instead of someone else's? (Regardless of being paid to do so.) Is Apple forcing Safari users to use Google search engine?
There is no "collusion" involve because Apple is not a competitor with Google, in the internet search engine market.
>Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium. The act of collusion involves people or companies which would typically compete against one another, but who conspire to work together to gain an unfair market advantage. <
Over 90% of internet searches are already done using Google search engine. How much of that would change if Google was not the default search engine on Safari. About 3.7% at the most. That's only if every Safari user don't use the Google search engine as their default.
Google has a huge search engine market share because they have 70% of the browser market with Chrome. Google search engine is obviously the default on Chrome. Chrome competes with Safari in the browser market. If Google and Apple made a deal so Chrome becomes the default browser on iOS and MacOS, then there might be an anti-trust case. For sure there would be, if Microsoft made such a deal with Windows.
If these anti-trust politicians wants to limit Google dominance in the search engine market, then they might have success by forcing Google to not have Google search engine as the default on Chrome. Which might actually be a monopoly that is subject to anti-trust, in the browser market.
Just because the search engine market on iOS and MacOS might be very lucrative in terms of ROI, this shouldn't make the 25% of iOS and MacOS users, a separate "relevant market" for anti-trust consideration. And neither should the 3.7% market share of Safari users.
The real anti-trust would be between Google and Facebook in the paid online ad market. If it can be proven that Google and Facebook colluded to fix the price of online ads, to agree to not complete with each other in certain areas and among other things to limit competition between themselves and over all, then the US (and specially the EU), can expect a massive pay day.
https://nypost.com/2021/10/18/details-of-alleged-google-facebook-collusion-must-be-made-public-judge-orders/
I doubt the EU would swallow that one quickly.
Everything depends on what gets dragged up from meetings years ago.
I think it's highly unlikely but if it were to emerge...
Info on law firms involved within the linked case.
The reason why Google is paying Apple to be the default search engine is because consumers that own Apple devices spends more time on the internet and spend more money, than consumers using Android or Windows. By a long shot. Google can charge a premium for targeted ads aimed toward consumers using iOS and MacOS. What ever Google is paying Apple to be the default search engine on Apple devices, is more than made up by how much more ad revenue they generate from Apple device users. Not by any gain in search engine marketshare.
There's nothing anti-completive about paying to have more access to Apple customers. Plus Google is also paying Apple what ever it takes to keep Bing from being chosen as their default search engine and thus giving Microsoft better access to consumers using Apple devices. If Google had no competition in the search engine market, they would not have to pay Apple anything to be the default. If Google had no competition in the search engine market, Google search engine would always be the default, by default. This is not a secret.
https://www.businessinsider.com/ios-users-spend-more-than-android-users-2015-12
https://www.marketingdive.com/news/survey-iphone-owners-spend-more-have-higher-incomes-than-android-users/541008/
https://moz.com/blog/apple-vs-android-aov
Any anti-trust issue here?
https://www.tasteofhome.com/article/this-is-why-costco-only-accepts-visa-cards/
Visa is paying Costco (by way of a big reduction in the transaction fee), to be the only CC Costco will accept. In the US, Visa have over twice the marketshare of MasterCard or American Express. (when it comes purchases made with a CC.)