In a filing today appealing the antitrust ruling against its search business, Google argues that its long-standing agreement with Apple reflects legal competition, not anticompetitive exclusion. Here are the details.
A little context
In August 2024, the Department of Justice won its antitrust case against Googleand the court found that the company had illegally maintained monopolies in general search and search advertising.
From Justice Amit Mehta’s conclusion:
Having carefully considered and evaluated the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist and has acted as such to maintain its monopoly. You have violated Section 2 of the Sherman Act.
The case then moved to the appeals phase, where the court considered what restrictions should be imposed on Google’s search business, now that it had been found to be a monopoly.
One of the most followed questions throughout the process was what would happen to Apple’s search agreement with Google.
The terms of the deal. it became clearer during the case: Apple established Google as the default search engine in Safari on iPhone, iPad, and Mac, in exchange for 36% of search advertising revenue generated through Safari.
In practice, as court documents revealed, Google paid Apple around $20 billion in 2022 alone.
When the relief 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 rival search engines (or generative AI products). Perhaps most importantly, it also imposed a 12-month default limit.
As a result, Google cannot condition revenue sharing on keeping any Google service as the default for more than a year, which, in practice, means that Google’s competitors will have an annual opportunity to offer Apple a better deal.
That brings us to today.
Google appeal decision
In a filing today with the United States Court of Appeals for the District of Columbia Circuit (via Reuters), Google asks the court to overturn the antitrust ruling against its entire search business.
Broadly, the company argues that the district court made several legal errors, including by treating its browser agreements with Apple as exclusionary, defining the relevant search markets too narrowly (antitrust cases live or die by market definition), and imposing remedies that force Google to share data and search results with rivals.
In the document, Google refers to its agreement with Apple as a result of legal competition based on the merits, rather than an exclusive anti-competitive agreement:
As the district court found, browser makers chose Google because they “value its quality and continue to select Google as the default because its search engine offers the best option for monetizing queries.” Apple described choosing Google as a “no brainer” because it was “a sure thing. They have the best search engine, they know how to advertise, and they are monetizing very well.” Bing, on the other hand, was “horrible at monetizing advertising.”
Google also argues that while the court considered its agreement with Apple exclusive, the agreement simply made Google the default search engine in Safari. Rival search engines, the company notes, are still 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 agreement with Google.
To try to further prove its point, Google points to testimony from Apple’s senior vice president of services and health, Eddy Cue, regarding Microsoft’s attempts to replace Google as Safari’s default search engine:
Although Microsoft offered to pay Apple 100% of the search advertising revenue generated if Bing became the default, Apple believed it would still earn less because users would abandon the default Bing in favor of Google. Given users’ strong preference for Google, there was “’no price that Microsoft (Apple) could offer’” to make Bing the default system that would be most 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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