Apple Inc.’s lucrative agreement to use Alphabet Inc.’s Google as the default search engine for the iPhone includes a provision that the two tech giants will “support and defend” the deal against government scrutiny, a top Apple executive said at an antitrust trial.
(Bloomberg) — Apple Inc.’s lucrative agreement to use Alphabet Inc.’s Google as the default search engine for the iPhone includes a provision that the two tech giants will “support and defend” the deal against government scrutiny, a top Apple executive said at an antitrust trial.
Their longtime contract was renegotiated in 2016 to include the provision, Apple’s Senior Vice President of Services Eddy Cue disclosed Tuesday in a Washington federal court, where the US government is pressing its claim that Google operates a monopoly in the search business.
Cue, the architect of the most recent version of the agreement, said the provision for a joint defense was added at Google’s request. He said it was handled by company lawyers so he couldn’t speak directly to why it was included. Around that time, the European Union was investigating Google’s dominance in online search.
During his testimony, the executive defended Apple’s arrangement with its tech rival, saying it was the best choice for customers to have Google as the default search engine.
“There certainly wasn’t a valid alternative we would have gone to at the time,” Cue said. “I don’t know what we would have done” if the deal had collapsed, he said.
Google first became the default option in the Safari browser in 2002. That deal has been revised several times. Cue said the contract was extended in 2021, after the Justice Department filed its initial case against Google’s search dominance the year before.
Google pays Apple billions of dollars for this prominent position on products like the iPhone, making the agreement of particular interest to the government. The question before the judge in the antitrust trial is whether the search giant pushed its way onto Apple devices at the expense of competitors.
In his testimony, Cue stressed that Apple sees no need to develop its own search tool because Google clearly is the best option. That differs from the company’s approach in other areas: It competes with Google in mapping software and voice assistants, as well as operating systems for phones and computers.
The Justice Department displayed an email from 2016 in which Cue told Apple Chief Executive Officer Tim Cook that Google CEO Sundar Pichai was not agreeing to Apple’s proposed revenue share. When the Justice Department’s attorney asked Cue whether Apple would have walked away from the negotiation, Cue said he didn’t seriously consider it, but Apple might have created its own search engine.
Read More: What’s at Stake in Google Trial on Antitrust Charges: QuickTake
Part of Cue’s testimony Tuesday was closed to the public because it involved internal company information that Apple and Google want to keep secret.
Cue was expected to testify that Apple has search arrangements with other companies, which provide the non-default options built into the Safari internet browser, according to a person familiar with the planned testimony. That includes Microsoft Corp.’s Bing, Yahoo, DuckDuckGo and Ecosia. Similar to its agreement with Google, Apple gets a slice of the advertising revenue generated when users select those search engines as their main option in Safari.
Last week, Apple machine learning chief John Giannandrea testified as well. The executive, who led search at Google before joining Apple in 2018, pointed to a new feature in iOS 17 and iPadOS 17 — the latest software that runs iPhones and iPads — that lets users assign a different default search engine for private browsing. That means consumers can switch between Google and another option more easily.
The case is US v. Google, 20-cv-3010, US District Court, District of Columbia.
(Updates with testimony from Apple executive.)
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