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Google allegedly pays Apple billions to keep out of search engine business

Google pays Apple billions of dollars so that it doesn’t create its own search engine, according to a new class action lawsuit.

It’s well known that Google pays Apple billions of dollars each year to remain the default search engine in its Safari web browser, and thus remain the primary search engine for hundreds of millions of iPhone and Mac users the world over.

By some estimates, Google’s payments represents as much as a fifth of Apple’s annual profits. It would certainly explain why Apple has never explicitly attempted to out-Google Google, despite having a captive audience of well over a billion users.

But the complainants behind a new US lawsuit suggest that this agreement is far shadier and more corrosive than you might expect. According to the lawsuit (as spotted by MacRumors), which was filed this week in California, the two tech titans have a non-compete agreement that contravenes US antitrust laws.

The lawsuit claims that Apple CEO Tim Cook and Google CEO Sundar Pichai indulge in “regular secret meetings”, and that Google has agreed to make multi-billion-dollar payments to keep Apple out of the search engine business that it has dominated for decades.

Not only that, but it’s alleged that the agreement involves Apple actively suppressing and even acquiring potential search engine suppliers. The result of such an agreement, it’s claimed, is higher advertising rates for all.

Apple does include the option to include other search engines in Safari, including Bing, Yahoo, and DuckDuckGo, which undoubtedly serves to dampen complaints over Google’s preferential treatment. But these allegations go a fair deal deeper than that.

Both companies have received significant antitrust pressure in recent years, including for this search engine agreement. Which perhaps explains why there have been rumours that Apple is working on own search engine in the background, precisely for the day that this lucrative agreement is legislated against.

With the lawsuit appealing for “the breakup of Google into separate and independent companies and the breakup of Apple into separate and independent companies,” it’ll be interesting to see how this one pans out.

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