Not sure if "secret agreement" is the right word when everyone who has paid any attention to the industry knows about Google paying Apple to be the default search engine. That's gone on for years, and the user isn't locked in, that's just the default. 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.
That's basically how I see it, too, but if any proof were to emerge, both companies would be bracing themselves for some very, hefty fines.
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.
If any proof of what, were to emerge? If there were proof that secret meetings took place between Apple and Google, where Google agreed to pay Apple to be their default search engine, how does that change what nearly everyone already knows? That Apple is getting paid by Google to be their default search engine. Neither party have denied this deal. The only thing that is a secret is how much Google is paying Apple.
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.
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.
'proof' would be like evidence along the lines of Google asking Apple to make Google Search the default search engine on iOS devices and Apple refusing, and then for Google to turn around and say, 'OK. What if we double our offer but throw in one more condition - that you do not enter the search engine market'. And then Apple decided to bite.
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...
Even if Google were to pay Apple to not develop a search engine in order to ward off competition, Google can not be charged with any anti-trust violation for reducing competition that did not happen and can not be proven would happen. There is no proof that if Apple were to develop a search engine, that Google will lose a significant percentage of their market share in the search engine market, due Apple competition. It would be delusional thinking that if Apple developed their own search engine, that it would it capture in any short period of time, much more of the search engine market, than the 3.7% of Safari market share in the browser market. Even if Apple were to make their search engine the only choice in Safari. Microsoft Bing isn't even close to being the majority search engine in Windows, even though it's the default in Edge and I.E..
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.
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.)
Your Costco isn't applicable in this context.
Were they asked not to compete directly with VISA for payment processing in exchange for payments? Not as far as we know.
Does Costco have 'gatekeeper' status among retailers? No.
The Costco example is like your favourite pizza chain only offering Pepsi or Coke.
If anything surfaced to imply that Apple had acted to 'harm' competition (via its gatekeeper status) in exchange for payment I'm fairly sure it would have a very hard time in the EU. Of course not only Apple. Google too.
California Crane School, Inc. filed a class action antitrust case [3:21-cv-10001, C.C.S.I. v Google LLC] on 12/27/21 against Google and Apple and the Chief Executive Officers of both companies alleging violations of the Antitrust Laws of the United States.
Info on law firms involved within the linked case.
California Crane School Inc?
For the suit to go ANYWHERE doesn’t the plaintiff have to show how they were harmed? I could understand this if it were another search company. But this is literally a school to teach people to be crane operators. There is no way they were harmed or even involved in any way by the actions even if any of it were true.
"The complaint claims that advertising rates are subsequently higher than rates would be in a competitive system. It therefore seeks an injunction prohibiting the non-compete agreement between Google and Apple, a cessation of the profit-sharing agreement and preferential treatment, and an end to the multi-billion dollar payments."
Not sure if "secret agreement" is the right word when everyone who has paid any attention to the industry knows about Google paying Apple to be the default search engine. That's gone on for years, and the user isn't locked in, that's just the default. 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.
That's basically how I see it, too, but if any proof were to emerge, both companies would be bracing themselves for some very, hefty fines.
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.
If any proof of what, were to emerge? If there were proof that secret meetings took place between Apple and Google, where Google agreed to pay Apple to be their default search engine, how does that change what nearly everyone already knows? That Apple is getting paid by Google to be their default search engine. Neither party have denied this deal. The only thing that is a secret is how much Google is paying Apple.
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.
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.
'proof' would be like evidence along the lines of Google asking Apple to make Google Search the default search engine on iOS devices and Apple refusing, and then for Google to turn around and say, 'OK. What if we double our offer but throw in one more condition - that you do not enter the search engine market'. And then Apple decided to bite.
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...
Even if Google were to pay Apple to not develop a search engine in order to ward off competition, Google can not be charged with any anti-trust violation for reducing competition that did not happen and can not be proven would happen. There is no proof that if Apple were to develop a search engine, that Google will lose a significant percentage of their market share in the search engine market, due Apple competition. It would be delusional thinking that if Apple developed their own search engine, that it would it capture in any short period of time, much more of the search engine market, than the 3.7% of Safari market share in the browser market. Even if Apple were to make their search engine the only choice in Safari. Microsoft Bing isn't even close to being the majority search engine in Windows, even though it's the default in Edge and I.E..
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.
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.)
Your Costco isn't applicable in this context.
Were they asked not to compete directly with VISA for payment processing in exchange for payments? Not as far as we know.
Does Costco have 'gatekeeper' status among retailers? No.
The Costco example is like your favourite pizza chain only offering Pepsi or Coke.
If anything surfaced to imply that Apple had acted to 'harm' competition (via its gatekeeper status) in exchange for payment I'm fairly sure it would have a very hard time in the EU. Of course not only Apple. Google too.
The Costco example was an analogy of Google paying Apple to be have Google search engine as their default search engine. Visa is paying Costco (in the form of lower transaction fees) to have Visa CC as their "default" CC used by Costco customers. Even if MasterCard were to offer Costco the same transaction saving, Costco would have to refuse.
And you are right. Google paying Apple to be have Google search engine as their default search engine is like Pepsi or Coca Cola rewarding diners to be the "default" soft drink served in their diners. Or companies paying supermarkets more in "slotting fees", to have their products placed on the supermarket prime shelves.
You think Google have any fear of losing market shares to Apple, if Apple were to compete with them by developing an internet search engine? And no one is being forced to use Google search engine. Not even on Chrome. Anyone think that Apple search engine market share would even be close to that of a company whose OS in on about 80% of the World desktop computers?
What make anyone think that Apple not entering the internet search engine market, "harms" competition?
If Apple were to seriously consider developing their own internet search engine but decided not to, could the EU charge them with anti-competitive behavior because their decision to not develop the search engine "harmed" competition?
If Apple were to develop their own internet search engine and Yahoo and DDG had to shut down because Apple search engine took away too much of their market shares on iOS, was this good for competition? Or did Apple "harm" competition by developing a search engine for their platform?
Wouldn't Apple promoting their own search engine on their own platform, by making it the default, amount to unfair competition? Isn't it considered anti--competitive for "gatekeepers" to promote their own products, on their own platform? Thus putting other competing internet search engines at a disadvantage. Would the EU also be guilty on anti-competitive behavior if they discouraged Apple from developing a search engine because of the "gatekeeper" status they placed on Apple?
So how can the EU charge Google with anti-competitive behavior if they were to pay Apple to not develop a search engine, when there is no proof that Apple having a search engine would be good for competition? How do they know that Apple not developing a search engine, for what ever reasons, harms competition.
It would be different if Apple already had an internet search engine with market shares and then Google paid Apple to shut it down, with the hope of gaining market shares from those no longer being able to use Apple search engine. This is clearly anti-competitive as Apple and Google would be competitors at the time.
In order to charge some one with harming competition, the harm must have already occurred. Not on some conjecture that harm will or might occur. Well, maybe not in the EU. They might think differently over there and not in a good way.
Google cares about revenue. Every time you search with Google, Google is making money. It doesn't matter if you click through on an ad or not.
It wants to protect those revenues and is willing to pay billions to Apple to just to have Google Search be the default option. That should be a good a good indicator to how much it thinks the deal is worth.
I can assure you that any competitor that steps on its turf means that its revenues could take a hit.
The thing is, not any competitor can pull off the task of creating a 'go to' search engine. It takes massive resources and huge investments in algorithms (and AI). We have Bing as an established player and and few others but how many are 'go to' search engines?
Where are the captive mobile audiences? Android/GMS, iOS/GMS and HarmonyOS/HMS. The latter isn't relevant in the west just yet but is already the third major platform worldwide.
Then you have the wider web scenario with Windows/Mac/Linux etc.
It should be clear to anyone that Apple making a search engine and refusing Google's payments would have a potentially dramatic impact on Google's revenues.
We can assume this because Google must be making more from the agreement than it actually pays Apple.
Whether that situation and the fact that both companies are considered gatekeepers is harming competition is practically a given in the eyes of the EU. Meta and Amazon are in a similar situation.
That is one thing. Another, is if anything were to surface that proved Apple accepted payment in return for not developing and pushing 'Apple Search'. That is to say 'not competing' with Google for those revenues in exchange for payment.
Like I said, I think that's unlikely, but a lot of these kinds of practices were baked many years ago when there was nowhere near as much scrutiny as now and when both companies weren't considered gatekeepers.
Comments
Were they asked not to compete directly with VISA for payment processing in exchange for payments? Not as far as we know.
Does Costco have 'gatekeeper' status among retailers? No.
The Costco example is like your favourite pizza chain only offering Pepsi or Coke.
If anything surfaced to imply that Apple had acted to 'harm' competition (via its gatekeeper status) in exchange for payment I'm fairly sure it would have a very hard time in the EU. Of course not only Apple. Google too.
The Costco example was an analogy of Google paying Apple to be have Google search engine as their default search engine. Visa is paying Costco (in the form of lower transaction fees) to have Visa CC as their "default" CC used by Costco customers. Even if MasterCard were to offer Costco the same transaction saving, Costco would have to refuse.
And you are right. Google paying Apple to be have Google search engine as their default search engine is like Pepsi or Coca Cola rewarding diners to be the "default" soft drink served in their diners. Or companies paying supermarkets more in "slotting fees", to have their products placed on the supermarket prime shelves.
https://www.bedrockanalytics.com/blog/what-goes-into-a-slotting-fee/ ;
https://www.npr.org/transcripts/718711109
Have you ever seen the market share of the 6 internet search engines with the largest market share?
https://www.oberlo.com/statistics/search-engine-market-share
You think Google have any fear of losing market shares to Apple, if Apple were to compete with them by developing an internet search engine? And no one is being forced to use Google search engine. Not even on Chrome. Anyone think that Apple search engine market share would even be close to that of a company whose OS in on about 80% of the World desktop computers?
What make anyone think that Apple not entering the internet search engine market, "harms" competition?
If Apple were to seriously consider developing their own internet search engine but decided not to, could the EU charge them with anti-competitive behavior because their decision to not develop the search engine "harmed" competition?
If Apple were to develop their own internet search engine and Yahoo and DDG had to shut down because Apple search engine took away too much of their market shares on iOS, was this good for competition? Or did Apple "harm" competition by developing a search engine for their platform?
Wouldn't Apple promoting their own search engine on their own platform, by making it the default, amount to unfair competition? Isn't it considered anti--competitive for "gatekeepers" to promote their own products, on their own platform? Thus putting other competing internet search engines at a disadvantage. Would the EU also be guilty on anti-competitive behavior if they discouraged Apple from developing a search engine because of the "gatekeeper" status they placed on Apple?
So how can the EU charge Google with anti-competitive behavior if they were to pay Apple to not develop a search engine, when there is no proof that Apple having a search engine would be good for competition? How do they know that Apple not developing a search engine, for what ever reasons, harms competition.
It would be different if Apple already had an internet search engine with market shares and then Google paid Apple to shut it down, with the hope of gaining market shares from those no longer being able to use Apple search engine. This is clearly anti-competitive as Apple and Google would be competitors at the time.
In order to charge some one with harming competition, the harm must have already occurred. Not on some conjecture that harm will or might occur. Well, maybe not in the EU. They might think differently over there and not in a good way.
It wants to protect those revenues and is willing to pay billions to Apple to just to have Google Search be the default option. That should be a good a good indicator to how much it thinks the deal is worth.
I can assure you that any competitor that steps on its turf means that its revenues could take a hit.
The thing is, not any competitor can pull off the task of creating a 'go to' search engine. It takes massive resources and huge investments in algorithms (and AI). We have Bing as an established player and and few others but how many are 'go to' search engines?
Where are the captive mobile audiences? Android/GMS, iOS/GMS and HarmonyOS/HMS. The latter isn't relevant in the west just yet but is already the third major platform worldwide.
Then you have the wider web scenario with Windows/Mac/Linux etc.
It should be clear to anyone that Apple making a search engine and refusing Google's payments would have a potentially dramatic impact on Google's revenues.
We can assume this because Google must be making more from the agreement than it actually pays Apple.
Whether that situation and the fact that both companies are considered gatekeepers is harming competition is practically a given in the eyes of the EU. Meta and Amazon are in a similar situation.
That is one thing. Another, is if anything were to surface that proved Apple accepted payment in return for not developing and pushing 'Apple Search'. That is to say 'not competing' with Google for those revenues in exchange for payment.
Like I said, I think that's unlikely, but a lot of these kinds of practices were baked many years ago when there was nowhere near as much scrutiny as now and when both companies weren't considered gatekeepers.