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The fifth week of the monumental U.S. vs. Google antitrust trial has cast a glaring spotlight on the revenue-sharing deal between Google and Apple—worth a reported $10 billion—over the latter’s position as the default search engine.
Now, the legal basis for that deal is being questioned.
If the courts find it illegal, Google’s massive search ad revenues could be up for grabs.
Also at stake is the possible separation of Google’s search ads business from its search engine, which would lead to ad revenue opportunities for other companies, including Apple. Meanwhile, publishers and advertisers could sue Google for damages.
Here’s what’s critical for marketers.
Apple’s leverage with Google
Earlier this week, Joan Braddi, Google’s vp for product partnerships and the primary negotiator of the agreement with Apple, faced scrutiny by the Department of Justice and shed some light on the intricate relationship between these tech giants regarding search, reported The Verge.
“Would I be correct that, at least today, Apple has a lot of leverage in its negotiations with Google?” inquired Adam Severt, a DOJ attorney.
In response, Braddi offered a succinct affirmation: “Yes.”
“Can you think of another search partner who might have more leverage than Apple?” Severt followed up.
With equal brevity, Braddi responded, “Not offhand, no.”
How we got here
Over the last two decades, Google has maintained its coveted position as the default search engine on Apple’s Safari browser, a partnership that traces its origins back to the browser’s launch in 2003. This pricey revenue-sharing deal prevents people from making their own choice of browser while obstructing Apple’s development of its own search product.
Apple has a global mobile iOS market share of 29.6%, according to September stats from Global Stats Counter, making Safari critical for Google, an industry executive who’s not authorized to speak to the press told Adweek. Google’s Android global market share is 69.7%.
In the U.S., Apple smartphones have a 56.41% share of the market, according to September figures from Global Stats Counter.
