Apple Gets 36% of Google Revenue in Search Deal, Witness Says

Google pays Apple 36% of the revenue it earns from search advertising made through the Safari browser, the main economics expert for the Alphabet unit said Monday. From a report: Kevin Murphy, a University of Chicago professor, disclosed the number during his testimony in Google's defense at the Justice Department's antitrust trial in Washington. John Schmidtlein, Google's main litigator, visibly cringed when Murphy said the number, which was supposed to remain confidential.

Both Google and Apple had objected to revealing details publicly about their agreement. In a court filing last week, Google argued that revealing additional information about the deal "would unreasonably undermine Google's competitive standing in relation to both competitors and other counterparties."

Google's 36% Apple Tax

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Looks like Google's 'Don't be evil' motto got autocorrected to 'Don't reveal profits.' Too late now, huh? This is what happens when your economics professor is more of a 'leak' than 'speak' expert. And poor John Schmidtlein, visibly cringing? That's just his default reaction when numbers are involved. Guess Apple's new slogan should be 'Think Different, Earn 36%.' On the bright side, at least we now know the actual market value of a cringe.

Re:

[BishopBerkeley]

You're right, but Apple has to keep Alphabet profitable in order to keep milking it. Google is happy to pay this tax. After all, we know that Google stole the whole idea from Apple while Eric Schmidt was on Apple's board. It's Apple's way of exacting revenge by using Google's money to differentiate iphones from Androids. More than anything, I think Google doesn't want anyone to know that they are Apple's bitch.

Re:

[DamnOregonian]

"Earn", lol.

Go on plebs, and "earn" my some cash!

One wonders how much Apple's requirement that all browsers on iOS use Safari's WebKit component plays into this...
Are all web accesses from iOS inherently "Safari"?

Re:

[Plumpaquatsch]

One wonders how much Apple's requirement that all browsers on iOS use Safari's WebKit component plays into this... Are all web accesses from iOS inherently "Safari"?

How about "not at all". It's not the WebKit part that decides which search engine gets used.

Re:

[DamnOregonian]

How about "not at all". It's not the WebKit part that decides which search engine gets used.

You're adorable.
WebKit, alone, indeed does nothing.
But that's just the thing- you don't get to ship your own WebKit component. You must use Safari's.
Every browser is a wrapped Safari.
You have no fucking clue what that is doing with your search requests, or whatever URL you send to it to be rendered.
And given the insane monetary incentive here, it's very clear that your data is more valuable to Apple than your purchasing power.

Re:

[Plumpaquatsch]

Thanks for confirming you don't have a clue about iOS. Go suck a lemon.

Re:

[DamnOregonian]

Hahaha- that's your retort? A hand-wavy dipshit fanboi dance?
Give me a fucking break.

My statement was 100% factual. Yours was just fucking stupid.

Re:

[korgitser]

I find the Apple side here quite telling. While they are positioning themselves in the market as the privacy oriented company, and bash Google on a regular basis, "surprisingly" it turns out they are quite happy to take part of the ad/personal data business. Whodhavedunkit, the words and the actions differ...

WHOA

[93 Escort Wagon]

Nice work if you can get it, I guess!

"...which was supposed to remain confidential."

[clawsoon]

This is a great way to tell the difference between capitalism and a free market. In a free market, prices are transparent. Everybody knows what everybody is paying for everything, and that's how the market is able to respond in economically efficient ways.

In capitalism, by contrast, those with the most capital use that capital to control and distort the market in ways that are useful to them. Hiding information about prices is a distortion that pretty much everybody who matters agrees is a good and important thing for companies to do, and that's one way we know that we're living in a capitalism system, not a free market system.

Re:"...which was supposed to remain confidential."

[KiloByte]

Uhm no, "capitalism" usually means "free market". But really, the word is pretty worthless.

While it has been used a long long time before Marx, 99.99% of its uses in history have been either by communist countries/ideologues or by those influenced by them. And their definition is "any economic system other than communism or prehistoric family groups" (dubbed by them "primitive communism [wikipedia.org]" despite the cavemen never having The Party). Everything else they called "capitalism", including even economies that did not use money at all (such as early kibbutzim).

And, hiding information about prices was ubiquitous in communism, thus even that definition of "capitalism" doesn't provide a determiner.

Re:

[jbengt]

Uhm no, "capitalism" usually means "free market".

No, capitalism usually means that private owners of the means of production, whether small ma-and-pa businesses or large multi-national corporations, get to decide what to produce, how much to charge, etc.

But really, the word is pretty worthless.

OK, as the term is often used, I can agree with that.

Re:

[ljw1004]

In a free market, prices are transparent.

Agreed. Somehow the "anti-trust hearing" and "oops we wanted to keep it secret" seem a great statement of why anti-trust is needed.

Re:

[Anonymous Coward]

I agree, although the normal terms is that we are not pro capitalism, we are for free competition rid of monopolies. The definition of monopoly has not evolved to consider platforms as simple monopolies. Why should Apple earn money from people searches on google or 35% of any app or service? Well, because they can and nothing can stop it. The fact 35% is not enough to see 10,000 competitors rush the next day shows it's a natural monopoly or monopsony (more correctly stated).

I wonder if Microsoft was a contender at all

[lsllll]

Would Microsoft have been in a position to offer 66% of its revenue from the same source (Apple Safari)? It would have put a dent into Google's search and would have put extra money in MS pocket, not to mention give it more power. Yes, yes, I know Bing is not as good as Google, but Google is really not that great at all, either with all the ads. Apple would have flexed some muscle in the middle of all this as well.