In 2018, behind closed doors in the Bay Area, two of the world’s most powerful tech leaders discussed a deal worth tens of billions. What followed was a billion-dollar tug-of-war over default search engines that now threatens to break Google’s empire apart. Now, as Google navigates through this trial, its dominance and future are uncertain!
Tap in to uncover the behind-the-scenes power play that could reshape the internet as we know it.
00:00Have you ever thought about why for so many years you have always ended up searching on Google?
00:04How Google came to be known as the god of internet?
00:07And why Google might have to crumble down from this position?
00:10This video has all the answers.
00:12Somewhere in the Bay Area in late 2018,
00:15the two CEOs of Google and Apple met for their once-in-a-year sojourn.
00:21In general, Cook was extremely happy with the partnership they had with Google.
00:25We want to be deep, deep partners,
00:27tapely connected where our services end and yours begin.
00:30But Apple executives were concerned about a decline in revenue growth from their revenue share deal,
00:36where Google paid a large, undisclosed sum of money to be the default search engine on Safari.
00:42That is when Pichai responded with a proposal.
00:44What if Apple pre-installed a Google search app on every iOS device?
00:48He then strengthened his case.
00:50Search is what we do. People trust us to get this right.
00:52Google had seen that the Google app and widget were popular on Android
00:56and drove people to do more searching.
00:58More Google searches on Apple devices would be in more revenue for Apple.
01:02Everybody wins.
01:04Let's sign a 20-year deal.
01:05Apple famously doesn't preload third-party software onto its devices.
01:09But Tim Cook thought about it at least once before killing the proposal.
01:13Google's massive empire has been built on one little white search bar.
01:17Not so little as Washington District Judge Amit Mehta found after 10 weeks of testimony from more than 50 witnesses in hearings close to the public.
01:27When he ruled against Google in a 276-page antitrust judgment.
01:32Google is a monopolist and it has exploited its market dominance to stomp out rivals.
01:36Giving the company that performs 90% of the world's internet searches one of the most serious challenges it has ever faced.
01:44Including a possible forced breakup where Google would be prevented from using Chrome and Android OS to better Google search.
01:52We'll tell you the astonishing facts revealed in the trial and what goes on behind the scenes of these American giants.
01:58But if you're new to Bispo, please do subscribe, like, comment and share.
02:03Google has long paid to be the default search engine in Safari since 2002.
02:08Paying Apple $18 billion in 2021 for the privilege.
02:12It also paid other browsers like Mozilla, Firefox and Yahoo a total of $8.3 billion.
02:18A figure both Apple and Google try to keep confidential.
02:21Objecting to the question directed to their defense witness.
02:24How much?
02:25$18 billion.
02:26Whose revelation made Google's lawyer visibly cringe.
02:30Further revealing, Google gave Apple 36% of all search ad revenue that came from Safari.
02:36But for Google, even this $18 billion was a steal.
02:39Because if it weren't the default search engine on Apple's Safari, it would have lost revenues worth $50 billion.
02:46Left with no choice, Apple vigorously defended the numbers.
02:49We make Google the default search engine because we've always thought it was the best.
02:54Users can easily change away from it.
02:56Easily is, of course, a key and persistent point of contention in this trial.
03:00Take DuckDuckGo, whose market share is only a hundred million global searches a day compared to Google's several billion.
03:07Switching is way harder than it needs to be.
03:09There are just too many steps.
03:11Consumers should be able to choose their default search engine in one click.
03:14In contrast to the 15 complicated steps currently on Android.
03:19Though on Apple's Safari, it can be done in only four steps, taking just seconds.
03:24Google's lawyers counted with an example that pre-selection wasn't a big hurdle.
03:28Claiming rightly that Bing, which is pre-selected on Windows PCs, which have a billion plus users, doesn't give Microsoft the edge.
03:36Yet most PC users switch to Google because it's a better product.
03:40Though back in 2005, when Microsoft's Internet Explorer dominated the market,
03:45just five days before the launch of IE7, Google's then-top lawyer wrote to Microsoft,
03:51asking them to offer a choice screen to new IE7 users.
03:55Original default settings are very seldom changed to Google.
03:58Microsoft refused.
04:00And not long after, Pichai and a small team would start working on Chrome,
04:04which would eventually crush Explorer and Tile.
04:06Now, the shoe is on the other foot.
04:09Google's Android agreement requires manufacturers to prominently display a pre-installed Google search widget on phones.
04:16Something that has been legally contentious in the European Union for years
04:20because it allows Google to further improve its search results.
04:23Which is why the Department of Justice believed
04:26This case is about the future of the Internet and whether Google search will ever face meaningful competition.
04:31Two distinct events were instrumental in DOJ's case against Google.
04:35When a district judge ruled that Apple could maintain its locked-down iOS ecosystem
04:40and after Microsoft was allowed by a court in October 2023 to buy Activision Blizzard
04:45by convincing judges that they weren't simply trying to lock up a market,
04:49they were helping consumers too,
04:51saying companies who failed to compete in the market were the ones complaining.
04:55In Apple's case, the Fortnite publisher Epic had added a direct payment mechanism
05:00to its hit Battle Royale game in violation of Apple's rules.
05:03In response, Apple removed the game from its App Store,
05:07resulting in Epic filing an antitrust lawsuit,
05:09accusing Apple of monopolistic practices.
05:12In Microsoft's case, it successfully argued that they had to undertake a rapid consolidation in the games industry,
05:18as their far larger rival console maker Sony threatened to leave them in the dust.
05:23Competition was at the heart of Google's argument as well.
05:26Agreements to keep Google as the default search engine on Android helped create a viable mobile competitor to iOS.
05:33But Google's huge volume of contentious internal communications negates that argument,
05:39where it repeatedly states the huge benefit it gets from being the default search option.
05:44So much so that Google explicitly agreed as part of its search deal with Apple
05:48that it would not promote Chrome to Safari users.
05:52PitchEye was confronted with a 2007 email sent to him after a Google product strategy meeting
05:57that showed whenever people changed their browser homepage to Google,
06:01they did 15% more Google searches,
06:04and when they switched away, did 27% less.
06:07Focusing on the homepage is one of the most effective things we can do to make gains in search market share.
06:13But PitchEye defended well,
06:15Deals are about more than just money.
06:17Showing how Google uses revenue share to incentivize Android OEMs like Samsung, HTC and Motorola to promote their devices.
06:25And that because Android OS is free,
06:27smartphones can come at affordable prices starting from as low as $30.
06:31Helping bring hundreds of millions of people online all over the world.
06:35Some of the money Google makes on revenue share is allocated for security updates
06:39or for developing the next version, which ultimately benefits consumers.
06:44So it is no wonder, despite the adverse ruling, the judge complimented them.
06:48I struggle to see how Google has become less innovative over time
06:52because of a lack of meaningful competition.
06:54And it is not as though Google doesn't have to watch its back.
06:57In 2016, it upped the share it paid to Apple via search,
07:01as it was worried that Amazon was flirting with them,
07:04who were willing to pay Apple top dollar
07:06if it would bypass Google and send shopping search data directly to them.
07:10Google also worried about Apple's new suggestions feature in Safari,
07:14which would help users without sending everyone to Google's results page.
07:18This case mirrors the 1990s antitrust ruling against Microsoft,
07:22which also had internal communication
07:24about how they had cut off Netscape's air supply in the browser wars,
07:29where the DOJ forced Microsoft to allow Apple products to run on Windows PC,
07:33ironically, making it a significant beneficiary of that ruling.
07:37The remedy paved the way for Apple to launch iTunes,
07:40free from anti-competitive restrictions, excessive fees and retaliation.
07:44Acutely aware of this, Google issued a memo in 2003,
07:48urging Googlers to be sensitive about what words they use,
07:51even internally, citing the air supply example.
07:54Additionally, Google and Apple have for years faced monopoly complaints
07:58against their app stores.
07:59Alphabet settled by paying consumers $700 million,
08:02and open up the Play Store to competition,
08:05but still insists on levying a service fee of 27%,
08:08not much less than the current 30% it charges.
08:11They also agreed to settle a consumer privacy lawsuit
08:14after an internal image showed they were being followed,
08:17even while browsing in incognito mode.
08:20While Spotify's antitrust complaint in the EU against Apple
08:24resulted in a $2 billion fine early this year,
08:27via their new law, Digital Markets Act.
08:29Judge Mehta's 32-page document lays out a framework of remedies
08:34to be imposed on Google to restore competition.
08:37Microsoft's Bing, which has struggled to crack 4% market share for many years,
08:41could be a big beneficiary from the ruling.
08:43Now, Google is preparing to face yet another antitrust trial,
08:47this time for unfairly dictating prices to advertisers
08:51in the market for software used to buy and sell digital ads,
08:54a.k.a. ad tech.
08:56ProScript
08:57In the 1980s, when Pac-Man first came into American homes,
09:01they used Nintendo's home entertainment system to do so,
09:04paying them 30% for using their platform.
09:07This seems to be the origin story behind the 30% digital distribution fee
09:12that platforms charge to this day.
09:15Bisbo's Limerick
09:16Apple and Google made a secret pact.
09:18They banned it together and competition hacked.
09:21But the facts stumbled out,
09:23leaving one in no doubt
09:24that they overstretched their limits and penalties attract.
09:27You will also find these sources listed in our video description section.
