Apple-Google search deal faces antitrust spotlight
Google hands Apple billions of dollars annually to be the default search engine on the iPhone giant’s devices, an arrangement that’s coming under renewed scrutiny as part of the government's antitrust suit against Google.
Why it matters: Google is the go-to search engine on mobile devices due to this deal, together with other pacts with wireless carriers and Android device makers. Google says users would pick it anyway, but antitrust enforcers contend the deals give Google a huge advantage over its search rivals.
How it works: Under the deal, all web searches on the iPhone, as well as queries from other devices, are sent by default straight to Google. Users have the option to change that to an alternative like Microsoft’s Bing or privacy-first search site DuckDuckGo, but few bother.
- According to the New York Times, the deal sends $8 billion to $12 billion per year to Apple, accounting for as much as a fifth of the company's total profit.
The big picture: It's one of a number of ways that the giants of tech reinforce each other's core businesses even as they compete in other areas.
Between the lines: On top of the antitrust concerns, the deal arguably serves as a workaround that lets Apple preserve its reputation for preserving user privacy while still indirectly making money off Google's harvesting of customer data.
What they're saying: CEO Tim Cook defended the deal in a 2018 interview I did for "Axios on HBO."
"One, I think their search engine is the best. ... But, two, look at what we've done with the controls we've built in. We have private web browsing. We have an intelligent tracker prevention. ... It's not a perfect thing. I'd be the very first person to say that. But it goes a long way to helping."
- Google also defended the pacts with Apple and others in a blog post, likening them to the way brands pay for shelf space in a supermarket.
My thought bubble: Google need not go that far for an analogy. It's quite common in technology for companies to pay to have their software pre-installed on new phones or PCs, for example. However, such deals have also come under antitrust scrutiny when used to reinforce a dominant market position.