“Would I be correct that, at least today, Apple has a lot of leverage in its negotiations with Google?”
Adam Severt, a Department of Justice attorney, asked that question to Google’s head of product partnerships, Joan Braddi, yesterday after a long tour of Braddi’s dealings with Apple over her two-decade-plus career at Google. The two were in a Washington, DC, courtroom, where for the last several weeks, the landmark US v. Google antitrust trial has litigated every corner of the search industry.
Braddi’s response was simple enough. “Yes.” Severt followed up: “Can you think of another search partner who might have more leverage than Apple?” “Not offhand, no,” Braddi said.
This exchange reiterated what has become one of the central themes of the trial so far: the overwhelming importance of Apple to search. Much of the trial is about the deals Google signs with lots of companies, from browser makers to wireless carriers, to be the default search engine on their platforms. But there is no deal more important, more lucrative, or more industry-defining than Google and Apple’s agreement over Safari.
Apple has set Google as the default search engine in Safari across its products for more than 20 years, since the browser’s very first launch in 2003. Over the years, the deal has morphed into a revenue sharing system that sees Google reportedly pay Apple more than $10 billion a year to remain the default. That money or the fact that Google is the best search engine — or some combination of the two, depending on who you ask — has kept Apple from building its own search product, switching to a Google competitor, or allowing users to choose a browser when they set up their phone.
Practically anyone who is asked about the Apple deal says they’d give anything to be part of it. “They basically king-make,” Microsoft CEO Satya Nadella said in testimony earlier this month. Gabriel Weinberg, the CEO of DuckDuckGo, told the court that switching even Apple’s private-browsing default to his engine would have increased DuckDuckGo’s market share “multiple times over.”
Google knows the importance of this deal more than anyone. And the DOJ has shown evidence that even Google finds the power of its Apple alliance uncomfortable. When current CEO Sundar Pichai was running the nascent Chrome browser in 2007, he worried in an email to Larry Page and Sergey Brin about the “optics” of the deal. “I know we are insisting on default, but at the same time I think we should encourage them to have Yahoo as a choice in the pull down or some other easy option,” he wrote, according to exhibits shown in court. “I don’t think it is a good user experience nor the optics is great for us to be the only provider in the browser.”
“I don’t think it is a good user experience nor the optics is great for us to be the only provider in the browser.”
Technically, Google isn’t the only choice. Apple users can switch their default search engine to Yahoo, DuckDuckGo, Bing, and Ecosia, and many third-party browsers can also be set as the device’s default. Apple and Google both argue it’s easy to switch — Apple’s Eddy Cue recited the steps during his testimony — but the DOJ and others have argued that switching is both difficult and irrelevant. People don’t switch, they argue. That’s why defaults are all that matters. (Apple says it doesn’t know whether people switch because it doesn’t collect that information for privacy reasons.) And while Google has been arguing that people can and do switch, evidence throughout the trial has shown that Google itself knows exactly how much defaults matter. In one internal study that has come up in US v. Google, the company found that people who switched their browser homepage to Google logged 55 percent more searches a week and fewer visits to other search engines. “Choice seems influenced by handy access to search box,” they wrote, “often determined by the default home page.”
Why is the Apple deal in particular so important? It’s like Oprah said: a billion pockets, y’all. Becoming the default search engine in Safari is a surefire way to get massive global scale. But the trial makes clear it’s not just that more users means more searches means more ads means more money. Apple is a dominant player on mobile in particular — it owns about half the smartphone market in the US, and globally, it’s the only meaningful competition to Android, which, of course, Google already owns and controls. The only way any competitor could quickly access many millions of users, and thus the most important moat for Google to protect, is through Safari on iOS.
The first thing any search engine needs, in order to be great, is searches. The more people search, the more the company behind the engine can learn what they’re looking for. It can identify common (and uncommon) misspellings of queries and more accurately direct people to the right place, it can figure out that people who type in “spiderman holland’’ are looking for Tom Holland and not Dutch superheroes, and it can see where people go when they type in things the engine has simply never seen before. More searches make better searches, plain and simple. And Apple is one of the biggest search portals on earth.
This is not a new or contentious stance, by the way. Nadella said on the stand that he’s been trying for a decade to make Bing the Apple default, even offering Apple all of the economic upside, just to increase what he called “the query stream.” In 2009, then-Google executive Marissa Mayer wrote in an internal email that “you do get better as you have more users — that’s why we have the best spell check, the best personalized search, the best refinements, etc.” The best Bing has been able to do is power Yahoo searches and get the data that comes with them, but that pales in comparison to Google’s mobile traffic.
Over the years, as other companies have pushed to become Apple’s preferred partner, Google has resisted anything Apple did that might lead to users doing fewer Google searches — including introducing new search-like features of its own. In iOS 8, for instance, Apple added “Spotlight Suggestions,” which would appear when you started to type in the Safari search bar and redirect you to websites, App Store results, and even Maps locations. An internal Google presentation about the change said that it could result in both query loss and revenue loss. “Bottom Line: It’s bad,” read the first slide in the presentation.
Apple did look into partnering with, investing in, or even buying Bing
Apple had at various times actually considered several different search options, according to what John Giannandrea — a former Google executive who now runs machine learning and AI at Apple — testified during the trial. At one point, CEO Tim Cook was presented with four potential options: build Siri into a more full search product; collaborate on a Knowledge Graph-based platform with Microsoft; invest directly in Bing and turn it into a native search product; or acquire Bing from Microsoft. Those options all came with two concerns: competing directly with Google’s excellent search product and the fact that doing so would almost certainly end the billion-dollar revenue sharing deal between the two companies.
Eventually, in a 2016 amendment to the Google / Apple search deal, it was agreed that Apple “could not expand farther than what they were doing in Sept 2016 (as we did not wish for them to bleed off traffic),” as Braddi put it in a 2018 email to a colleague. Part of Google’s argument to Apple was about the quality of Apple’s suggestions — people searching for insurance probably don’t want a Wikipedia page about insurance, which is what they were getting — but it’s clear that even the overwhelmingly dominant search player was obsessed with making sure it still got as many queries as possible coming through the Safari search bar.
We’ve heard it over and over throughout the first weeks of this trial: there is practically no price not worth paying to be Apple’s default search provider. Nadella said he’s willing to spend up to $15 billion a year just to get Bing in the search bar and said he’s absolutely confident that the increase in usage would make Bing just as good as Google in very little time. Google, as Braddi acknowledged on the stand this week, is lining the pockets of its principal mobile competitor to a massive degree just to stay in the default position. A huge number of search hopefuls, from DuckDuckGo to Neeva to Brave, are simply waiting around, hoping Judge Amit Mehta gives them a chance to get in.
US v. Google isn’t directly about Apple’s history or future with search. But it has revealed a fascinating alternate universe in the tech industry. Search, as Nadella put it in his testimony, is “the organizing layer of the web.” Today, that layer looks like Google. But it seems plausible that if Google and Apple didn’t have a mutually beneficial, fabulously lucrative search deal, the search market — by far the largest business in tech — might look very different. If Apple had invested in Siri or bought Bing, if DuckDuckGo was a more formidable competitor, if the hundreds of billions of search-ad dollars were spread around Silicon Valley rather than concentrated in Google’s coffers, we might use the internet in entirely different ways.
Google has been the Safari search engine for two decades. And as we look back at this era in tech, it’s possible that may turn out to have been the most important internet land grab of them all.