The U.S. v. Google antitrust trial has brought to light some interesting information about Google’s search revenue sharing with Apple and other companies. According to testimony from University of Chicago professor Kevin Murphy, Google pays Apple 36% of the revenue it collects from search advertising via the Safari browser. This revelation, made under oath, caused Google’s main litigator, John Schmidtlein, to visibly cringe in the courtroom.
The reason for Google’s reaction is clear – the search giant had been keeping this figure secret, likely to prevent other manufacturers from renegotiating their own deals if they found out how much Apple was receiving. In fact, Google submitted a filing with the court last week stating that revealing more information about its deal with Apple “would unreasonably undermine Google’s competitive standing in relation to both competitors and other counterparties.”
The revenue sharing agreement between Apple and Google dates back to 2002 and is considered one of the most important deals for Google, as it also established Google as the default search engine on the iPhone. However, the Justice Department is using these deals as evidence to argue that Google is making these payments to prevent other search engines from becoming the default option on tech devices, which could be considered anti-competitive.
If the DOJ wins its case and proves that Google is engaging in anti-competitive behavior in search, it could potentially demand that the company be broken apart into different business units. This trial has shed light on the inner workings of these tech giants and could have far-reaching implications for the future of the industry.