Google Basically Pays Apple to Stay Out of the Search Engine Business, Class Action Lawsuit Alleges

[BootsWalking]

So Apple is now accused of antitrust violations for NOT developing a search engine, and NOT forcing people to use a particular search engine? Just making google the default, which can easily be changed? Is there anything in this day in age that is not considered antitrust from a large company?

There are lots of things that aren't considered antitrust by large companies in this day, but making a secret arrangement to be paid by a competitor to not compete for customers, then directing those customers to that same competitor just happens to not be one of them.

 

[bookofxero]

Look, Tim has to get the money to pay China for their ridiculous grift... I mean "investment"... over 5 years from somewhere.

Also: isn't the whole point of Alphabet that it "broke up" Google?

 

[Jason2000]

This is nuts. I don't know what else to say.

 

[Adarna]

Building one as good as Google's is a monumental challenge. People will just make fun of Apple when its search results suck compared to Google's and the first thing techies recommend everyone to do is to change the default Apple search engine to Google.

Developing a search engine is also extremely costly. Since Apple's primary business isn't selling ads, it would be extremely hard for Apple to recuperate the cost. There is no other way to make money besides selling ads for a search engine.

In addition, if Apple made a search engine, lawyers would be targeting Apple for making its own search engine the default.

It's actually lose/lose for Apple to make a search engine.

Eventually some yahoo will sue Apple over Apple Maps being the default mapping app on their devices.

 

[BootsWalking]

But Google doesn’t have the entire market to themselves. As the article points out, there’s bing, DuckDuckGo, yahoo, etc. and all of those can be used on your Apple products with a simple change.

And if your example was correct (which it’s not), that wouldn’t be capitalism, it would be the opposite; anti-capitalism. Capitalism is about free markets and competition (which there is with other search engines). What you described is not free market, and therefore not capitalism.

Having a market all to yourself is a not a litmus test on whether a corporation's behavior can be considered anticompetitive. To wit:

Market Power​

Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages. In addition, that leading position must be sustainable over time: if competitive forces or the entry of new firms could discipline the conduct of the leading firm, courts are unlikely to find that the firm has lasting market power.

Source: https://www.ftc.gov/tips-advice/com...ws/single-firm-conduct/monopolization-defined

 

[Agilehands]

No. Google is blocking Apple through money to let them compete against them. Imagine paying another carpenter in your city yearly for not working so you can have the entire market for yourself and charge whatever you want. Its gross capitalism and it needs to be stopped.

isn't it more like I am paying another smart person who is not a carpenter but I believe he can be a good carpenter ?

 

[breather]

Break up apple? How?? To what?

 

[as.fonseca]

People have long realized that there is an oligopoly formed by the tech giants to prevent the emergence of disruptive companies and technologies that threaten the status quo of today's technologies and markets that each dominates. The signals are getting stronger, but unfortunately regulators do nothing.

 

[yabeweb]

So you say that the Carpenter must be forced to work? Perhaps even having to pay fines if he stops working (e.g. retiring) while he is the only competitor on a given market?

I am not saying people should be forced to work, I am saying that it's a bad thing to allow forcing another carpenter out of the market.

 

[jdclifford]

So Apple is now accused of antitrust violations for NOT developing a search engine, and NOT forcing people to use a particular search engine? Just making google the default, which can easily be changed? Is there anything in this day in age that is not considered antitrust from a large company?

Reminds me of the "browser wars" back in the 90s. Remember all the problems Microsoft had by favoring its own browser?

 

[axcess99]

isn't it more like I am paying another smart person who is not a carpenter but I believe he can be a good carpenter ?

Or the local cooper having an agreement with the local cabinetmaker for the cabinetmaker to not get into the barrel-making market.

They both know how to build things out of wood and could expand into the other's craft if they really wanted to.


I am trying to figure out what the solution to the apple/google setup is? Apple makes their own the default search engine, or they force you to pick from a randomized list of search providers during device setup, apple can do either but they just aren't "allowed" to accept money for it? The whole premise seems flawed.

 

[alFR]

Tim Cook publicly railed against Google for having a business plan that monetizes users' privacy, at the same time negotiating a secret deal to be paid $12B/year to deliver Apple's users to Google for monetization. Think about that the next time Mr. Cook proclaims how important your privacy is to Apple.

Literally from the article you are commenting on (emphasis mine):

It's no secret Apple and Google have a considerable monetary agreement that ensures Google's position as the default search engine on Apple devices. Neither company has ever confirmed exactly how much Google pays to be the default search engine on Apple devices in the United States, the United Kingdom, and other countries, but it's rumored to be in the billions.

So, there appear to be two flaws in your argument:

1. It's not a secret deal
2. It's not a secret deal

I know that's technically only one flaw, but it's such a massive one I thought I'd mention it twice.

 

[MBAir2010]

Too bad Apple chose the money over developing a private search engine for its users.
I already changed to Ecosia. I dont really use a search engine anymore as I always visit the same sites so it works for me for the couple searches I do from time to time.

And they grow trees!
ecosia was great, then something were i deleted them
i should give Ecosia another chance!

 

[azentropy]

Apple: We aren't doing it for money, we are doing it for a blankload of money!

 

[b4rtw]

These are quite some allegations to make. Imagine if true, then bring out the popcorn. This will be awesome.

 

[BootsWalking]

Literally from the article you are commenting on (emphasis mine):



So, there appear to be two flaws in your argument:

1. It's not a secret deal
2. It's not a secret deal

I know that's technically only one flaw, but it's such a massive one I thought I'd mention it twice.

It was a secret deal started in 2014 that only became known when it was leaked during Google's lawsuit with Oracle:

According to Bloomberg, over the course of the hearing, an “analysis of the search engine giant’s tightly held financial information was disclosed… by an Oracle attorney.” Among other interesting bits of financial information, not only was the revenue that Google pulls in from the Android operating system disclosed, but the amount of money that Google pays Apple to remain the default search engine on iOS devices was made public, as well.
...
As soon as the numbers were divulged both Google and Apple attempted to have the judge strike the numbers from the record. An attorney for Google said “that percentage just stated, that should be sealed… That’s not a publicly known number.” Both companies filed to block the numbers from the transcript, and to have the transcript sealed.
...
“The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple… Both Google and Apple have always treated this information as extremely confidential.” Although the transcript has since vanished from public record, it’s unclear whether or not the court ruled on the requests for it to be sealed.

Source:

Google Paid Apple an Insane Amount of Money to Be the Default Search Engine

Google Paid Apple an Insane Amount of Money to Be the Default iPhone Search Engine

www.idropnews.com

The fact a deal made in secret became known to others by being leaked does change the fact it was a secret deal.

 

[Zoboomafoo]

The problem is that while the paid carpenter is happy, consumers get ruined.
In this scenario, laws are there to protect users not the carpenter.

If you remove competition, prices will skyrocket.

Idk, this practice seems EXCEEDINGLY common, yeah?

If I go to a hockey game, they sell coke products not Pepsi cause coke is paying them to sell coke only.

This situation seems even better for consumers as the hockey arena equivalent would be allowing people to bring in Pepsi products if they want, perhaps by jumping through hoops.

 

[smaffei]

If the other carpenter is happy with the deal then where's the issue exactly?

To extend the analogy…

If part of the deal is that the "other carpenter" prevents apprentices from joining the union in order to maintain their agreement… then, that's where the "issue" lies.

 

[dominiongamma]

But yet every year Apple takes 9 billion to make Google the default search engine…

 

[dominiongamma]

These are quite some allegations to make. Imagine if true, then bring out the popcorn. This will be awesome.

Too bad Apple loses ground by taking 9 billion I think a year from Google for keeping Google the default search engine

 

[1t1sm3]

Apple 100% has a full search engine product ready to go live when convenient to them. No way they haven't deemed it to be too risky not to have something in the bag when needed.

 

[iBluetooth]

Too bad Apple chose the money over developing a private search engine for its users.
I already changed to Ecosia. I dont really use a search engine anymore as I always visit the same sites so it works for me for the couple searches I do from time to time.

Don't take the story as a fact. Apple most likely won't go into the Search business, because they have to collect and sell data through advertisements to make money on it. And they just left the advertisement business. I think Google is just paying, because iOS users are a lucrative market for ads.

 

[I7guy]

This one is going to be interesting. Especially the let’s break google up.

 

[MauiPa]

I’d like to see anyone make a clear case of the anti-trust violations. It seems more like nada. Breakup of google for making a product placement agreement? While I do support that sleazy data stealing company being broken up, sounds like a stretch. The argument against apple seems even weaker, have a search engine, get it included and have those who want to use it select it

 

[yabeweb]

Idk, this practice seems EXCEEDINGLY common, yeah?

If I go to a hockey game, they sell coke products not Pepsi cause coke is paying them to sell coke only.

This situation seems even better for consumers as the hockey arena equivalent would be allowing people to bring in Pepsi products if they want, perhaps by jumping through hoops.

I think it differs a bit, It would be like Coke paying Pepsi Co. not to make Pepsi .....

What you are talking is about exclusive deals but they are very specific, they do seem the same, but while one is limited to specific places the other is a complete 100% monopoly.

And we cannot say that either Coke or Pepsi have a monopoly on the "coke".