📚 Google Gives Apple Cut of Chrome iOS Search Revenue

According to The Register, Google has been paying Apple a portion of search revenue generated by people using Google Chrome on iOS. From the report: This is one of the aspects of the relationship between the two tech goliaths that currently concerns the UK's Competition and Markets Authority (CMA). Though everyone knows Google pays Apple, Samsung, and other manufacturers billions of dollars to make its web search engine the default on devices, it has not been reported until now that the CMA has been looking into Chrome on iOS and its role in a search revenue sharing deal Google has with Apple. The British competition watchdog is worried that Google's payments to Apple discourage the iPhone maker from competing with Google. Substantial payments for doing nothing incentivize more of the same, it's argued. This perhaps explains why Apple, though hugely profitable, has not launched a rival search engine or invested in the development of its Safari browser to the point that it could become a credible challenger to Chrome. Having Google pay Apple "a significant share of revenue from Google Search traffic" passing through its own Chrome browser on iOS is difficult to explain. Apple does not provide any obvious value to people seeking to use Google Search within Google Chrome. One attempt to explain the arrangement can be found in an antitrust lawsuit filed on December 27, 2021, and subsequently amended [PDF] on March 29, 2022. The complaint, filed by the Alioto Law Firm in San Francisco, claims Apple has been paid for the profits it would have made if it had competed with Google, without the cost and challenge of doing so. "Because more than half of Google's search business was conducted through Apple devices, Apple was a major potential threat to Google, and that threat was designated by Google as 'Code Red,'" the complaint contends. "Google paid billions of dollars to Apple and agreed to share its profits with Apple to eliminate the threat and fear of Apple as a competitor." These alleged revenue sharing arrangements -- which are known in detail only to a limited number of people and have yet to be fully disclosed -- have been noted by the UK CMA as well as the US Justice Department, which along with eleven US States, filed an antitrust complaint against Google on October 20, 2020. Reached by phone, attorney Joseph M. Alioto, who filed the private antitrust lawsuit, told The Register it would not surprise him to learn that Google has been paying Apple for search revenue derived from Chrome. He said Google's deal with Apple, which began at $1 billion per year, reached as high as $15 billion annually in 2021. "The division of the market is per se illegal under the antitrust laws," said Alioto. Apple and Google are currently trying to have the case dismissed citing lack of evidence of a horizontal agreement between the two companies, and other supposed deficiencies.

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