More from US v. Google: all the news from the search antitrust showdown
The big DOJ antitrust trial over Google Search revealed last week that Big G pays Apple $20 billion a year to be the default search on iOS. That’s over 20 percent of the “services” revenue Tim Cook loves to talk about on earnings calls, but hey, where is all that money on the balance sheet?
BI’s Peter Kafka found out: Apple categorizes it as “advertising.”
[Business Insider]
That’s according to Apple’s Eddy Cue in court documents filed ahead of closing arguments in the DoJ’s antitrust case against Google. It’s the first time the number has been confirmed, and marks an increase from the $18 billion reportedly paid in 2021. The filing also shows that Google’s 2020 payments were 17.5 percent of the Apple’s operating income.
That was the message from Apple in an internal strategy document from 2013. It has been revealed as part of the ongoing US v. Google antitrust trial. The document details Apple’s approach to privacy to differentiate from competitors like Google and Microsoft. Apple later went on to make privacy an even bigger part of its marketing pitch in iPhone commercials in 2019, with the “privacy matters” slogan.
After a fun back-and-forth in the courtroom about the merits of redacting an exhibit during Google CEO Sundar Pichai’s testimony, we got a new tidbit of information. Google explicitly agreed, as part of its search deal with Apple, that it would not promote Chrome to Safari users — which it could do with banners in other Google apps, pop-ups, and the like, and does to many other services.
We’re slowly but surely learning how these deals get done, and it keeps getting juicier.
We’re a bit over an hour into Sundar Pichai’s testimony in US v. Google, and we’ve spent a surprising amount of the morning in a time machine back to 2005.
That’s when Microsoft released Internet Explorer 7 (the browser a Pichai-led team would ultimately crush by launching Google Chrome). At the time, Google’s legal chief David Drummond sent Microsoft a letter that was very mad about search defaults. Drummond wanted a choice screen, and said Google was very worried about the anticompetitive nature of Microsoft prioritizing its own search engine.
Pichai is being asked a lot of questions that amount to, “this is now the argument against you, right?” So far, he’s sparring with it pretty well.
I’m here today to see Google CEO Sundar Pichai testify in the ongoing US v. Google antitrust trial. I just saw Pichai go through security, and there’s a lot of energy in the building to see how Google’s leader defends the company’s moves in search.
Things are set to start at 9:30, first with Google’s lawyers and then cross examination from the Justice Department. The line to get in is long, it’s weirdly warm in here, it’s gonna be a day, friends.
The US v. Google antitrust case may be frustratingly shrouded in secrecy, but occasionally we get some fun nuggets. The quote above comes from an internal email sent by Google’s Jim Kolotouros, VP of Android Platform Partnerships. “Chrome exists to serve Google search,” he writes. “If it cannot do that because it is regulated to be set by the user, the value of users using Chrome goes to almost zero (for me).”
Pichai will be one of the first witnesses Google calls for its antitrust defense, which started officially today. He’ll help make the case that Google’s search success is due to its own innovation and missteps by competitors, not big deals with companies like Apple (which it allegedly paid $18 billion in 2021).
After a slight delay, the Department of Justice has posted an exhibit from earlier this week in US v. Google, shedding light on the details of Apple and Google’s multibillion-dollar search deal.
The 2007 email thread features Sundar Pichai expressing his discomfort with making Google the sole search provider on Safari, while also revealing another potential option he disliked: fully different editions of Apple’s browser, one with Google and one with Yahoo as the chosen search engine.
Search is the biggest business in the business. And for anyone wanting to make it big in search, the fastest way to win is in Safari.
Now, his email to Larry Page and Sergey Brin (among others) has surfaced in the US v. Google trial, where the Department of Justice is taking aim at Google’s multibillion-dollar deal for prime placement in Apple’s browser. Google argues it’s simply the best choice, but in those early years, Pichai appeared ambivalent about the exclusivity deal regardless.
“I know we are insisting on default, but at the same time I think we should encourage them to have Yahoo as a choice in the pull down or some other easy option,” he wrote. “I don’t think it is a good user experience nor the optics is great for us to be the only provider in the browser.”
The government is in the middle of a trial with Google, heading toward one with Amazon, and in general trying to change the way we think about monopolies. Also: Sam Bankman-Fried’s trial has begun, and it has already been eventful. All that, and an ebook debate, on the flagship podcast of the Sherman Act.
On the stand in US v. Google, the Microsoft CEO said he’d do just about anything to make Bing better. Google’s lawyers said he should have been doing that for decades.
A huge part of Google’s defense in US v. Google is that it’s not illegal to build a great product. And to prove that that’s all that’s happening here, Google lawyer John Schmidtlein has spent the last 60 minutes reminding Satya Nadella of Microsoft’s decades of bad decisions about Internet Explorer, Live Search, Windows Phone, and all its other browser and mobile screwups. He even has an internal poll that is headlined: “Our Mobile Story Sucks.”
Nadella is mostly just responding “that sounds right” and “correct.” He’s not arguing that Bing is better than Google — he’s arguing that it’s impossible to be better than Google. And Schmidtlein says no, it’s just that Bing sucks. And that’s your fault, not ours.