In a brief filed today appealing the antitrust ruling against its search business, Google says its long-standing deal with Apple reflects legal competition, not anticompetitive exclusion. Here are the details.
A little context
In August 2024, the Justice Department won its antitrust case against Google, with the court finding that the company had illegally maintained monopolies in general search and search advertising.
Excerpt from Judge Amit Mehta’s conclusion:
After carefully reviewing and evaluating the testimony and evidence, the court comes to the following conclusion: Google is a monopoly and it acted as such to maintain its monopoly. He violated Section 2 of the Sherman Act.
The case then moved to the remedy phase, where the court considered what restrictions should be placed on Google’s search business now that it has been proven to be a monopoly.
One of the most closely watched questions throughout the proceedings was what would happen to the research agreement between Apple and Google.
The terms of the deal became clearer over the course of the case: Apple set Google as the default search engine in Safari on iPhone, iPad and Mac, in exchange for 36% of the search advertising revenue generated through Safari.
In practice, as court documents revealed, Google paid Apple around $20 billion in 2022 alone.
After the appeals phase concluded, Judge Mehta allowed Google to continue paying Apple for default placement in Safari, but imposed new limits on those agreements.
Under the new terms, Google can no longer make the Safari deal exclusive or prevent Apple from promoting competing search engines (or generative AI products). Perhaps more importantly, it also imposed a 12-month default limit.
As a result, Google cannot condition revenue sharing on maintaining a default Google service for more than a year, which in practice means that Google’s competitors will have an annual chance to offer Apple a better deal.
That brings us to today.
Google appeals the decision
In a brief filed today with the United States Court of Appeals for the District of Columbia Circuit (via Reuters), Google is asking the court to overturn in its entirety the antitrust ruling against its search business.
In broad terms, the company argues that the district court made several legal errors, including treating its browser agreements with Apple as proprietary, defining relevant search markets too narrowly (antitrust cases live or die by market definition), and imposing remedies that require Google to share data and search results with its competitors.
In the document, Google refers to its deal with Apple as the result of legal competition on the merits, rather than an anti-competitive exclusive agreement:
As the district court found, browser makers chose Google because they “like its quality and continue to select Google by default because its search engine provides the best choice for monetizing queries.” Apple described the choice of Google as “a no-brainer” because it was “a sure thing. They have the best search engine, they know how to advertise and they monetize very well.” Bing, on the other hand, was “horrible at monetizing advertising.”
Google also argues that even though the court treated its agreement with Apple as exclusive, the agreement simply made Google the default search engine in Safari. Competing search engines, the company notes, remain available through Safari settings.
The company is also trying to argue that the decision to design Safari around a single default search engine was Apple’s, unrelated to its deal with Google.
Further trying to prove its point, Google points to testimony from Eddy Cue, Apple’s senior vice president of Services and Health, on Microsoft’s attempts to replace Google as Safari’s default search engine:
Even though Microsoft offered to pay Apple 100% of search advertising revenue if Bing became the default, Apple believed it would still earn less because users would abandon Bing’s default in favor of Google. Given users’ strong preference for Google, there was “no price that Microsoft could ever offer (Apple)” to make Bing the default that would be more profitable for Apple.
Google also notes that Cue’s testimony included his argument that “we have to choose what’s best for our customers, and today, that’s still Google.”
You can read Google’s full appeal document here.
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