As the Justice Department’s antitrust trial against Google unfolds, we’re learning more about the secretive agreement between Apple and Google over Safari’s default search engine. It turns out Google gives Apple a 36% cut of its search ad revenue generated through Safari.
Bloomberg reported the detail that was disclosed today by University of Chicago professor Kevin Murphy, who is “the main economics expert” for Google.
As for why Apple is so involved in the DOJ’s antitrust case against Google, it’s because the iPhone dominates smartphones in the US, and Google pays Apple upwards of $20 billion annually to be the default search engine on Apple’s Safari browser.
The argument against Google is that by paying Apple to remain the default search engine, competing search engines have no chance to grow and actually be competitive.
There’s also an argument to be made that Google incentivizes Apple not to compete in search through its default search engine and ad sharing arrangement. For Apple, the deal easily makes up more than 10% of its profits.
While clearly profitable for Apple, the deal has also put Apple leadership in the awkward position of needing to defend the company it paints as anti-privacy.
Apple charges Google 36% of search ad revenue? Gee, that makes the 30% Apple takes from developers seem downright generous.
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