Google pays Apple a staggering 36% cut for default status on Safari

Google pays Apple a staggering 36% cut of revenue from searches on Safari in exchange for default status, witness accidentally blurts out at antitrust trial

  • Google and Apple had both sought to keep the details of the deal private
  • But witness Kevin Murphy let the figure slip in court testimony on Monday
  • Google’s default status on Safari makes it the main search engine for iPhone 

Google pays Apple a whopping 36 percent of revenue it earns from searches made through the Safari browser, a witness accidentally revealed during the company’s antitrust trial.

Since 2002, Google has been the default search engine on Apple’s Safari browser, an important deal that make it the de facto search tool on iPhones.

Both companies had sought to keep the financial details of the deal private, but on Monday, Google’s economics expert witness Kevin Murphy, a University of Chicago professor, let the figure slip during testimony in Washington DC, according to Bloomberg.

Google’s main trial attorney John Schmidtlein ‘visibly cringed’ when Murphy revealed the confidential number, the outlet reported.

Apple and Google did not immediately respond to requests for comment from DailyMail.com on Tuesday morning.

Google’s economics expert witness Kevin Murphy (above), a University of Chicago professor, accidentally revealed financial details of the company’s deal to be the default on Safari

Google CEO Sundar Pichai is seen leaving the antitrust trial in DC last week, after testifying on the importance of making its search engine the default in keeping users loyal

The revelation came during testimony in the Department of Justice’s antitrust lawsuit against Google’s parent company, Alphabet. 

The US government brought the case over whether Google acted illegally to maintain its dominance of online search and parts of search advertising, including through deals like the one with Apple to be the default search option. 

If the government wins, the company may be forced to scrap some business practices that have helped it stay on top. 

Last week, Google CEO Sundar Pichai testified at the trial, acknowledging the importance of making its search engine the default in keeping users loyal. 

Google, which started paying for default status on devices in 2005, monitored its partners for compliance. 

At one point, the company expressed concern to Apple that its Safari browser would send particular queries, especially lucrative ones, to companies like Amazon.com.

‘We were obviously doing the deal for default placement,’ said Pichai in court, according to Reuters.

Pichai, who was called to testify by Google, was shown instances when the company pressed Apple, wireless companies and smartphone makers to make its search engine the default on their devices in exchange for revenue-sharing agreements.

‘We pay for preload exclusivity on a device-by-device basis,’ Pichai said under questioning by the Justice Department.

Since 2002, Google has been the default search engine on Apple’s Safari browser, an important deal that make it the de facto search tool on iPhones (file photo)

A lawyer for the Justice Department asked Pichai about a 2007 discussion among Google executives including Pichai, before he became chief executive, about an Apple request to let users choose their search engine on a new version of its Safari browser.

A document at the time said 75 percent of people do not change defaults and noted: ‘Defaults have strong impact.’

Pichai also took a couple of swipes at rival Microsoft’s browser, Internet Explorer.

‘The browser market at the time had kind of stagnated,’ Pichai said of the period before Google launched its Chrome browser, which competes with the Microsoft product.

‘They (Microsoft) were not that incented to improve the browser,’ he added, calling Chrome a ‘pretty dramatic improvement’ when it launched in 2008.

Google’s strength in search makes it a heavy hitter in the lucrative advertising market, its biggest revenue source.

Google has argued that if people are dissatisfied with default search engines, they can and do switch to another search provider. 

It has also argued the revenue-share agreements are legal and it has invested heavily to keep its search and advertising businesses competitive.

In cross-examination, the Justice Department pressed Pichai about allegations that Google executives marked sensitive documents as covered by attorney-client privilege when they were not and routinely deleted instant messages without determining if they should be saved as part of litigation.

‘This is not an area I was focused on,’ Pichai said.

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