Alphabet’s (Nasdaq: GOOGL) economics expert may have inadvertently revealed that Google allocates a substantial 36% of all search ad revenue generated from Safari to Apple (Nasdaq: AAPL).
Google has for years tried to keep this information confidential and was intending to keep it so until University of Chicago professor Kevin Murphy said the number during his testimony in Google’s defense at the Justice Department’s antitrust trial in Washington.
Bloomberg News reported that John Schmidtlein, the main litigator for Google, “visibly cringed” when the economics expert gave the number.
Both Google and Apple had resisted making details of their agreement public, with Google arguing that such disclosure could adversely impact its competitive position. The partnership, established in 2002, designates Google as the default search engine on Apple’s Safari, a crucial position given the widespread use of iPhones in the United States.
The Justice Department wants to make that agreement proof of Google illegally monopolizing the search engine and search advertising markets.
Google’s competitors have previously said, even before the lucrative figure was revealed, that the deal between Apple and Google is damaging to their business.
“Everybody talks about the open web,” Microsoft (Nasdaq: MSFT) CEO Satya Nadella said when he testified in October. “But there really is the Google web.”
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
