What just happened? Why did Apple make Google the default search engine on iPhones? According to senior vice president of services Eddy Cue, who is testifying in the antitrust trial against Google, the decision was made simply because there “wasn’t a valid alternative.”
Speaking in federal court, Cue shed some light on the estimated $19 billion per year that Google is believed to be paying Apple under the agreement to keep its search engine the default option in Apple’s products.
“When we’re picking search engines, we pick the best one and we let the customer easily change them,” Cue said. He added that Apple does offer alternatives, but they have some that “customers have never heard of,” which can make them wary of making a perceived wrong choice.
The Information Services Agreement (ISA) between the two tech giants, which had been in place since 2002, was renegotiated in 2016. Cue hoped to convince CEO Sundar Pichai to increase Apple’s share of the revenue Google made from advertising via searches carried out on Apple devices, writes The Verge.
Cue said that asking for an increase was “the right thing” as Apple had built the technology and “deserved” a higher revenue share. Pichai wanted to keep the share unchanged, and they ultimately compromised on an undisclosed number.
“There certainly wasn’t a valid alternative we would have gone to at the time,” Cue said. “I don’t know what we would have done if the deal had collapsed.”
Cue confirmed that the agreement also included a provision that Apple and Google would support and defend the deal against government scrutiny. Google had requested it while under investigation in Europe.
The question being raised is whether Google used its power and money to crush rivals and push its way onto Apple’s devices, or if its search product was the best option for consumers.
Cue said Apple had no reason to develop its own search tool as Google’s is clearly the best one available. That contrasts with other areas where the two companies compete, such as mapping software.
Meagan Bellshaw, a Justice Department lawyer, asked Cue why the iPhone setup process didn’t let users choose their default search engine. Cue acknowledged that ISA didn’t allow users this choice, but argued that “We try to get people up and running as fast as possible […] Setup is just critical stuff.” He also said showing people a bunch of search engines they’d never heard of would be a bad experience for users.
“We make Google be the default search engine,” Cue explained, “because we’ve always thought it was the best. We pick the best one and let users easily change it.” The executive also said Apple doesn’t track how many people make the change to search engines that are not from Google due to privacy concerns.
According to Statcounter, Google holds a nearly 92% share of the global search engine market. It’s followed in second place by Bing, which has a 3% share, then Yandex (1.49%) and Yahoo (1.17%). Apple also has agreements with other search engines, Cue said. The company generates money from these if users change their defaults to them.
Part of Cue’s testimony yesterday was closed to the public because it involved confidential information that Apple and Google don’t want exposed.