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Google’s default search engine fee may be revealed


It is an open secret that Google pays Apple billions of dollars each year to be the default search engine on Apple devices. In other words, the search engine used when you simply type a search term into the combined address / search bar.

No company discloses the amount, which leads to different estimates over the years. But a new class action lawsuit could reveal actual amounts…

Background

Being the default search engine on iPhones, iPads, and Macs is very valuable to Google, because relatively few people ever change the default. This means that Google receives a huge amount of its search traffic from Apple users, and thus the ability to place ads in front of them.

Add to that the fact that Apple’s customers are a particularly valuable demographic group, and you’ll see why Google would be willing to pay a lot of money to keep the status quo.

One of the more recent estimates of the amount was from Bernstein.

Bernstein analysts estimate that Google’s payout to Apple will increase to $ 15 billion in 2021, and to between $ 18 billion and $ 20 billion in 2022. The data is based on “disclosure in Apple’s public documents, as well as a bottom-up analysis of Google’s TAC.” and (traffic acquisition costs) payments. ”

Default search group lawsuit

A class action lawsuit has been filed alleging that the arrangement is detrimental to both competing search companies and companies that place ads on Google. He further states that the agreement violates antitrust laws.

California Crane School, Inc. filed a class action lawsuit against the monopoly [3:21-cv-10001, C.C.S.I. v Google LLC] on 12/27/21 against Google and Apple and the CEOs of both companies for alleged violations of United States antitrust laws.

The lawsuit alleges that Google and Apple have agreed that Apple will not compete in the Internet search business against Google. The lawsuit alleges that the funds used to enforce the non-compete agreement included; (1) Google would share its search profits with Apple; (2) Apple would grant preferential treatment to Google for all Apple devices; (3) regular secret meetings between the executives of both companies; (4) annual payments of billions of dollars by Google to Apple not to compete in search; (5) suppressing competition from smaller competitors and removing competitors from the search market; (6) acquisition of actual and potential competitors. The complaint states that advertising rates are higher than those that would be in a competitive system. The lawsuit seeks a waiver of $ 1 billion in payments from Google to Apple.

The lawsuit seeks to ban the non-compete agreement between Google and Apple; profit sharing agreement; preferential treatment for Google on Apple devices; and the payment of billions of dollars by Google to Apple.

It can be said that consumers are indirectly harmed because higher advertising costs will be reflected in higher product prices.

The lawsuit also calls for the separation of Apple and Google into smaller companies.

Discover would probably reveal the amount paid

If the lawsuit continues until the disclosure process, then it would probably lead to the disclosure of the actual amounts paid to Apple.

Discovery is a pre-trial procedure in which each party has the right to request relevant information from the other, both by publishing otherwise confidential documents and by interviewing company executives. The details of the amounts actually paid seem to be extremely relevant to the case, so it is almost certain that they will be requested.

However, it should be noted that many class action lawsuits do not reach trial, or even the disclosure phase. Lawsuits can be resolved at an early stage, and defendants can also file motions to dismiss lawsuits before they can make any progress.

The lawsuit is filed by a relatively small company, so how long it will continue will probably depend in part on whether the lawyers manage to get some big names.

Via MacRumors. Photo: Solen Feyissa / Unsplash.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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