Lucrative, closed-door dealings between two of the world’s most powerful tech companies are under scrutiny at the Google antitrust trial in Washington, as senior Apple executives prepare to take the stand.
The pair of tech giants have been tight-lipped about the estimated $19 billion that Google pays Apple per year to ensure its search engine remains the default on iPhones and other Apple devices — a deal that spans 18 years. Both companies have sought to keep details of the transactions out of the public eye, with filings in the case heavily redacted.
At issue is whether this agreement is monopolistic, and shuts out Google’s competition from having automatic access to Apple’s billions of users… Rebecca Haw Allensworth, a Vanderbilt antitrust law professor, said Apple’s testimony will hopefully clarify the intent behind Google’s payments: Was it an above-board business deal, or a scheme to shut out competition?
“Google is paying billions of dollars to Apple to have that privileged status,” she said. “Any competitor to Google would also want access.”
Neil Shah, vice president of research at Counterpoint Research, points out that while Apple has 52 percent of the U.S. smartphone market overall, it commands a whopping 80 percent of the premium smartphone market. Google is paying to get its ads in front of these high-rollers using iPhones, and it’s splitting the profits with Apple.
“These ‘premium eyeballs’ which Apple has access to are very lucrative but hard to target for advertising companies such as Google due to Apple’s walled garden,” he said.