Court documents have revealed that Google paid Apple $1 billion dollars in 2014 to be iOS’s default search engine, reports Bloomberg. The sum was revealed in court transcripts of a copyright lawsuit that Oracle brought against Google in which it alleges the search giant used its Java software without paying for it to build Android.
When a user opens the mobile Safari app on iOS and taps the address bar, the search field by default is linked to Google’s search engine. In more recent versions of iOS, users can manually change the search engine to search through Microsoft’s Bing, Yahoo, or DuckDuckGo, though most users don’t know they can or don’t care to change the search provider. Being the default search engine on iOS can be highly lucrative given the number of searches performed through the iPhone’s Safari browser each day, since those search results also serve up ads. Safari is the second-most-popular web browser worldwide when mobile devices are taken into account.
For years it has been rumored that Google was paying a hefty fee to be the default search engine on iOS—now, thanks to transcripts from the Oracle v. Google case, we know how big those numbers are.
According to the transcript from a January 14th hearing, a lawyer representing Oracle told the court that in 2014 Google paid Apple $1 billion through a revenue-sharing agreement where Apple and Google had an agreement in which "at one point in time the revenue share was 34 percent."
Bloomberg said it was not clear from the transcripts if the 34% referred to Apple's take of the ad revenue share or if that is the amount of the ad revenue Google retained for itself. A lawyer for Google immediately objected when the Oracle lawyer made the percentage known, stating "That percentage just stated, that should be sealed. We are talking hypotheticals here. That’s not a publicly known number."
At the time the magistrate judge presiding over the case refused to block the information from the transcript. On January 20th, Google, along with Apple, then petitioned to have the transcript completely sealed. "The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple. Both Apple and Google have always treated this information as extremely confidential," Google said in a filing.
Bloomberg notes that, after that the transcript "vanished without a trace from electronic court records at about 3 p.m.," but not before it obtained a copy.
While the news of the amount Google pays to Apple to be iOS’s default search engine could affect its dealings with other manufacturers, the revelation also stands to hurt Apple from a PR standpoint. Time and time again, Apple CEO Tim Cook has slammed Google for its revenue model where the search giant profits from a user’s private data. It now appears that Apple itself is profiting via the same user data through its revenue-sharing agreement with Google.