Class action lawsuit alleges Google paying Apple to stay out of search engine business

Alioto Law Firm:

California Crane School, Inc. filed a class action antitrust case on 12/27/21 against Google and Apple and the Chief Executive Officers of both companies alleging violations of the Antitrust Laws of the United States.

And:

The complaint charges that Google and Apple agreed that Apple would not compete in the internet search business against Google.

And these allegations at the core of the non-compete approach:

  1. Google would share it’s search profits with Apple
  2. Apple would give preferential treatment to Google for all Apple devices
  3. Regular secret meetings between the executives of both companies
  4. Annual multi-billion-dollar payments by Google to Apple not to compete in the search business
  5. Suppression of the competition of smaller competitors and foreclosing competitors from the search market
  6. Acquiring actual and potential competitors.

What the complaint seeks to accomplish:

The complaint asks for an injunction prohibiting the non-compete agreement between Google and Apple; the profit-sharing agreement; the preferential treatment for Google on Apple devices; and the payment of billions of dollars by Google to Apple.

The complaint also calls for the breakup of Google into separate and independent companies and the breakup of Apple into separate and independent companies in accordance with the precedent of the breakup of Standard Oil company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others.

Massive consequences, if successful.

Could Apple develop its own search engine on a scale of Google’s? They’d either have to eat the massive cost of staffing and supporting such an engine, or offset the cost with an advertising business of their own. And adding a search engine would certainly draw even more antitrust scrutiny.

Apple could also exit any proprietary search agreement with Google but, of course, that would be costly as well.

From this New York Times exposé:

Apple now receives an estimated $8 billion to $12 billion in annual payments — up from $1 billion a year in 2014 — in exchange for building Google’s search engine into its products. It is probably the single biggest payment that Google makes to anyone and accounts for 14 to 21 percent of Apple’s annual profits. That’s not money Apple would be eager to walk away from.

Indeed.