On October 6, Beijing time, the U.S. Department of Justice’s lawsuit against search giant Google for monopoly has entered its fourth week. As the trial progresses, the largest antitrust case in 25 years is exposing some unknown behind-the-scenes stories. Interest disputes among technology giants have also gradually surfaced.

The U.S. Department of Justice believes that Google monopolizes the search market and squeezes out competitors. One of the main ways is to reach a default search agreement with Apple. With this agreement, Google has become the default search engine for the Safari browser on Apple's iPhone and other devices.

In recent days, executives from Microsoft, Apple, search engine DuckDuckGo, and Samsung Electronics have testified in court. Their testimony showed that Google's default search agreement with Apple became an insurmountable mountain for other search engines.


Four search engine options provided by Safari

How much impact does default search have on users? Microsoft CEO Satya Nadella pointed out in his testimony,Default settings are key to network effects in digital products, users may like a product very much, but they won’t change the default settings. "When it comes to changing search behavior, only the default settings matter. You get up every morning, brush your teeth, and then search on Google. Only by changing the default settings can you change that habit," he said.

Money can make the world go round

Google argued that other companies use Google search not because the company has a monopoly, but because Google's search engine is better. This is indeed one reason, but more importantly,Google spends billions of dollars to lure other companies into making Google search their default search engine, the most watched of which is the agreement between Google and Apple.


How much did Google pay Apple?

Apple has strong financial resources, with cash reserves as high as US$166.5 billion (approximately 1.2 trillion yuan) as of the end of the third fiscal quarter. So, how much money did Google give Apple to make Apple's heart beat? Let’s find out through the following numbers.

——$8 billion

Well-known Apple reporter Mark Gurman (Mark Gurman) said that Apple can obtain a share of Google search advertising revenue, which has earned approximately US$8 billion in revenue each year in recent years.

——$10 billion

U.S. Justice Department prosecutors say Google pays at least $10 billion a year to be the default search engine on devices from Apple and other companies. This is a general figure and does not clearly indicate how much money Apple took alone.

——$15 billion

Nadella testified that during his years as Microsoft CEO, he had always wanted Bing to replace Google as the default search engine on Apple devices, and was willing to pay nearly $15 billion per year, plus other additional costs, but failed. Perhaps, this money is not enough.

——$19 billion

Bernstein, a well-known investment bank, predicts that Google will pay Apple US$18 billion to US$19 billion under the default search agreement this year, which is close to 5% of Apple's 2022 revenue.

Apple can’t get rid of Google

Although Google has spent real money, Apple does not want to hang itself on a tree.Tried using DuckDuckGo search and even acquired Microsoft's Bing search, but all failed.

The testimony of John Giannandrea, Apple's head of machine learning and a former Google executive, showed that in 2018, Apple considered acquiring Bing Search or "investing billions of dollars" in a joint venture with Microsoft. Giannandria revealed that Apple was considering using Bing to replace Google in responding to some Siri queries and drive other functions on iPhone and Mac.


Giannandria confirms Apple considering acquiring Bing

In his testimony, Giannandria cited an internal presentation from Apple's business development chief Adrian Perica. In the manuscript, Perica outlined four cooperation situations between Apple and Microsoft: developing Siri independently, co-developing a technology called "Knowledge Graph", jointly owning Bing, and acquiring Bing.

However, the deal between Apple and Microsoft did not come to fruition. Giannandria said he believed it was Apple CEO Tim Cook who told Microsoft not to move forward with the deal.

So why did Apple break off negotiations? Or because of Google. "Obviously, if we entered into a joint venture with Bing, it would affect our relationship with Google," Giannandria said in testimony last week.

The power of a contract

In addition to Microsoft's Bing, Apple had also hoped to use DuckDuckGo to replace Google as the default search engine in the privacy mode of Apple's Safari browser.

Apple is serious about this partnership. DuckDuckGo CEO Gabriel Weinberg testified last month: "Our view is that they are actually very interested in this cooperation. The people we negotiate with are generally DuckDuckGo users who are interested in privacy."

Weinberg revealed that negotiations between the two parties lasted from 2016 to 2019, during which approximately 20 meetings and phone calls were held. During that time, Weinberg said, Apple's contract with Google for Safari's default search engine was "often a thorny issue that they didn't want to talk about."


Weinberg had hopes of striking a deal with Apple

In September 2018, DuckDuckGo sent people to Apple headquarters to discuss integration issues. Apple had said they were seriously considering integrating DuckDuckGo into Safari in 2019, but Weinberg later realized they still had some lingering concerns. In particular, Apple realizes it needs to figure out how to resolve issues related to its Google contract.

The cooperation was once close to success. After the 2018 Christmas holiday, DuckDuckGo received documents from Apple stating what its revenue share would be if DuckDuckGo became the default search engine in Safari's privacy mode. DuckDuckGO estimates that its market share "would increase severalfold" if it became the default search in private browsing mode.

However, by the summer of 2019, it became clear to DuckDuckGo that this partnership would not be happening. Apple did not announce this integration cooperation at the Worldwide Developers Conference in June of that year. Four months later, after a meeting, Weinberg concluded the deal was "dead."

DuckDuckGo has also tried to pitch Samsung, Mozilla and Opera to make it the default option for private browsing mode in these browsers, but no agreement has been reached. The company ultimately stopped pursuing this partnership model after concluding that "these companies' contracts with Google were a key impediment to our ability to complete deals with them."

Samsung was suppressed

Patrick Chang, a former executive at Samsung Electronics' venture capital unit SamsungNext, testified on Thursday that he had proposed expanding the use of mobile app developer BranchMetrics' search products in Samsung smartphones, but the proposal was resisted under pressure from Google. Branch's software provides an in-app search service.

Chang said he had pushed Samsung to expand search products using Branch on its Android smartphones, but without success. Branch founder and former CEO Alexander Austin testified in late September that as the company tried to reach deals with wireless carriers and smartphone makers, it removed some software features to resolve Google complaints. Austin pointed out that Branch must ensure that its searches only occur within the app and cannot be connected to the web. Chang said Samsung also faces resistance from wireless carriers such as AT&T, which helps Samsung sell Android phones.

The U.S. Department of Justice showed an email sent by Samsung executive David Eun in August 2020 during the trial. David Eng complained in an email, “Google is clearly spending money to suppress its competitors".