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

[the8thark]

Apple accepting money from Google not to enter the search engine market.
Apple accepting money from China to move business from Taiwan to China.

Apple is just using internal technologies never released to the public to avoid being sued under various countries monopoly laws.

That is . . . you can finish the rest of that sentence.
If I finish it, the post will (unfortunately) be removed.

As an aside, I use Duck Duck Go. I stopped using google search a long time ago for all the obvious security and privacy issues google search has.

 

[4jasontv]

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.

Or what if the USDA paid farmers to not grow crops?

 

[Phil77354]

. . . 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. . .

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.

I like the carpenter example and agree that while the two carpenters would probably be happy with this arrangement, their customers would not since they'd have fewer choices and probably end up paying more.

It seems to me that the arrangement between Google and Apple was previously thought to simply be one where Google paid to be the preferred search engine, but nothing was said (until now?) about the deal also including Apple agreeing to not compete by offering their own search engine. That aspect would seem to be illegal.

The tech industry is badly in need of greater regulation with this being only one example of many. Unfortunately we are living through an era where regulation is unpopular in general, not to mention that our government and legislators are woefully ignorant of tech in general and will struggle to do anything effective, if they do decide to work towards some sort of legislation.

 

[MacLawyer]

Lawyers up to mischief. This is a stupid suit.

 

[bbeagle]

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.

Really? Apple isn't in the search market.

It's like paying your local carpenter to not also be a plumber.

Just because Apple 'could' build a search engine, doesn't mean they need to. Does this mean that Amazon should be sued also because they're using Google Maps and not developing their own maps?

 

[yabeweb]

Really? Apple isn't in the search market.

Google is paying Apple not to be in the search market.

That's the issue.

 

[iPadified]

Surprisingly many capitalists seem to accept a failed market economy because companies then earn more money. Surprisingly many thinks it is better that the governments do not interfere and instead let the companies overcharge the customers.

 

[LeadingHeat]

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.

I’m just replying to your comment in hopes that others see it as well. This is right on the money.

 

[sracer]

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.

Bingo.

I hear about how great Bing, DuckDuckGo, and other internet search engines are and that Google search isn't good enough to warrant the loss of privacy by using it. (as if that is the only or primary way of losing privacy)

But every time I try alternatives, their search results are inferior to what Google provides. I use a search engine for the results they provide, not to make some statement about privacy.

There are times when I will use Bing... primarily for those things that Google has determined they will hide from results (and for Bing rewards... I've received $100's in Amazon gift cards)

Having said that, I think it would be in Apple customers' best interest for Apple to produce their own search engine. The amount of data that they have on their customers would allow them to produce a search engine that IS better than Google (for Apple customers). But as you've said, it would be a net loss financially for Apple to do it.

 

[cmaier]

Google is paying Apple not to be in the search market.

That's the issue.

Except apple is in the search market. They just don’t have a web interface. And they don’t have a web interface because they don’t want one.

 

[Jimmdean]

this isn't really any seedier than search itself. there is no legitimate money in search - it's all under-the-table.

 

[FlyingDutch]

Quite a ridiculous lawsuit…
To prevent a competition ? There is no competition in the web searching business… but you can use a different provider if you wish. Google is just the default one.

 

[redmac]

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.

Except that Apple in this example is not even a carpenter. It’s just a local business guide that gets paid to display an ad at the top of the carpenter listings page.

What’s next? Suing Ford for not offering a ride sharing service?

 

[Amazing Iceman]

Because people may doesn't know about alternatives because they're not shown. When you open safari for the first time you should be asked what search engine would you like to use and give some info what data they collect. If the App Store has this info easily displayed for the user why not add this rule for search engines?

Let the ignorant learn on their own. If you know about the alternatives, chose yours, and share it with others if you want.
It's like a newspaper running an ad for Home Depot and writing at the bottom that you could also buy at Lowe's or Ace Hardware.

 

[YorkshireBill]

I've always wondered why Apple never got into search. Seems like a bit of a no-brainer considering Google is in smartphones and Apple always enjoys full control over the whole experience. Although I guess some of the "focusing" decisions Apple have made (getting out of the router market with AirPort and the pro-photography market with Aperture) didn't make much sense either.

This search deal makes far more sense though if true. The only way to monetise search is through advertising. While Apple has muddied the waters somewhat with App Store advertising their general message has been "Adverts bad. Buying things good". If they were to run (or indeed buy) a search engine like DuckDuckGo the message would be "Our adverts good. Other adverts bad. Buying things good." Again if this is true (and the amounts of money being stated are true as well) this would effectively be Apple MASSIVELY benefitting from an advertising-driven search model through the backdoor.

 

[siddavis]

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.

One carpenter? There are no other skilled carpenters in this city? That place succccs. Is Apple the only viable company that could create a competing platform?

 

[topmounter]

It is remarkable that the specifics of such a significant and material agreement between two massive and influential public companies is anything less than fully transparent to both consumers and investors.

 

[msp3]

Not everyone wants or should be in every business. A search website that does not spy on you makes no money, and is fundamentally a bad idea no one would want to invest in.

You can be unhappy about Apple defaulting to Google (which they are being paid to do), but to say Google is paying Apple to stay out a business that makes no money unless you vertically integrate is just downright stupid.

 

[sparkinstx]

The article doesn't say who the plaintiff is. Is it the lawyer, Alioto? Or, who is he representing? Also, judging from the last name, I'm guessing he's related to the former mayor of SF, Joseph Alioto? His son, maybe? Grandson? The former mayor was a famous antitrust lawyer, and one of his biggest cases was Oakland Raiders team owner Al Davis vs. the NFL. A court ruled that NFL teams (like the Raiders) could move from city to city without needing approval from other teams.

 

[siddavis]

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".

But Pepsi is a company that makes soda - it is their core. Apple isn't a company that makes search engines - at least it's not their core.

In all honesty, I'm not a fan of this being part of the agreement, but I think it might be a stretch to say it violates laws and/or regulations. I'm no lawyer though, so I am certainly interested in others' takes on this.

 

[thingstoponder]

“the breakup of Google into separate and independent companies and the breakup of 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.”

Joke lawsuit

 

[siddavis]

And this deal does not prevent other carpenters to enter the market at will.

For me, this is the key. In fact I see the payment to Apple as a potential drain on Google that competitors are not making themselves. Granted, Google is flush with these funds, but if a competitor was able to invest $9B in R&D instead, it would seem they could produce a better product.

Also, what does everyone want the end game to be? Let's say Apple loses their $9B/year payment. They might try to supplant that loss by launching their own SE right? Well what might happen then? Oh, they might eliminate the competitors from their platform which results in... less choice for the consumer.

Regulators always make it seem like they are just out for the "little guy" until they just become a cog in the lobbying machine. Don't think for a second that companies like Facebook are really for the regulations they tout in those ads because they think it will be good for the little guy. They just want control over the regulation to create barriers to competition.

 

[6787872]

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.

blocking?? im not sure you know what that word means

 

[MisterK]

I've been wishing for a long time that Apple would develop their own search engine so this is concerning. Google still delivers the best results, but with how many ads they have, the space they take up at the head of the results page (and the privacy concerns that some have) it may not be as clear cut as it used to be. With every page having optimized its SEO for Google, it wouldn't be trivial for Apple to make a competitive Search, but the potential revenue would be huge. Could be one of those focus things – the thousand nos for every yes. Just feels like such a huge competitive opportunity.

 

[gaximus]

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.

Your analogy isn't exactly right, Apple's not a carpenter. Its like paying somebody that's not a carpenter to not become a carpenter. That person might have never wanted to become a carpenter. If someone came to me telling me they would pay me more money than I can make as a carpenter, to not be a carpenter, I would take that money.