Lawsuit claims Google pays Apple billions to stay out of the search engine business
Although Google and Apple have never disclosed an exact amount, it’s widely known that the search giant pays the iPhone maker billions each year to remain the default search engine on the iPhone, Mac and the rest of its devices. How much exactly has remained a mystery — for now, anyway.
A new class action lawsuit filed in California claims the arrangement hurts other search engine companies as well as the businesses who place ads with Google. It goes a step further as well, suggesting that Apple and Google should be broken up into smaller companies for violating US antitrust laws.
What’s particularly interesting about this lawsuit is that if it makes it as far as the discovery process, we could finally learn the exact amount that Google pays Apple each year to be the default search engine on its devices.
According to a recent estimate by the financial services firm AB Bernstein in an investor note seen by Ped30, Google’s payments to Apple could be between $18bn and $20bn this year based on disclosures in Apple’s public filings and from an analysis of Google’s traffic acquisition costs (TAC) payments.
Class action antitrust case
The lawsuit itself was filed by Alioto Law Firm on behalf of California Crane School which provides courses across the US for mobile crane operator certifications.
In a press release announcing the lawsuit, Alioto Law Firm lays out the claims put forth against the two tech giants by the company, saying:
“The complaint claims that the means used to effectuate the non-compete agreement included; (1) Google would share it’s search profits with Apple; (2) Apple would give preferential treatment to Google for all Apple devices; (3) regular secret meetings between the executives of both companies; (4) annual multi-billion-dollar payments by Google to Apple not to compete in the search business; (5) suppression of the competition of smaller competitors and foreclosing competitors from the search market; (6) acquiring actual and potential competitors.”
In addition to paying to remain the default search engine on it devices, part of the agreement between the two companies requires that Apple won’t compete against Google in the search business. While there have been rumors about an Apple Search Engine for some time now, if Apple was indeed developing its own search product, the company would be in violation of its existing agreement with Google.
Knowing exactly how much Google pays Apple each year to be its default search engine would be interesting but it’s likely that this class action lawsuit won’t make it to trial or even to the discovery phase as these types of suits are often settled before then and defendants can also file motions to have them dismissed.
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