Google Paid Apple $1 Billion to Keep Search Bar on IPhone in 2014
Google Paid Apple $1 Billion to Keep Search Bar on IPhone
By Joel Rosenblatt & Adam Satariano January 21, 2016
— 4:34 PM PST
Google Inc. is paying Apple Inc. a hefty fee to keep its
search bar on the iPhone.
Apple received $1 billion from its rival in 2014,
according to a transcript of court proceedings from Oracle Corp.’s copyright
lawsuit against Google. The search engine giant has an agreement with Apple
that gives the iPhone maker a percentage of the revenue Google generates
through the Apple device, an attorney for Oracle said at a Jan. 14 hearing in
federal court.
Rumors about how much Google pays Apple to be on the
iPhone have circulated for years, but the companies have never publicly
disclosed it. Kristin Huguet, a spokeswoman for Apple, and Google spokesman
Aaron Stein both declined to comment on the information disclosed in court.
The revenue-sharing agreement reveals the lengths Google
must go to keep people using its search tool on mobile devices. It also shows
how Apple benefits financially from Google’s advertising-based business model
that Chief Executive Officer Tim Cook has criticized as an intrusion of
privacy.
Oracle has been fighting Google since 2010 over claims
that the search engine company used its Java software without paying for it to
develop Android. The showdown has returned to U.S. District Judge William Alsup
in San Francisco after a pit stop at the U.S. Supreme Court, where Google lost
a bid to derail the case. The damages Oracle now seeks may exceed $1 billion
since it expanded its claims to cover newer Android versions.
34 Percent
Annette Hurst, the Oracle attorney who disclosed details
of the Google-Apple agreement at last week’s court hearing, said a Google
witness questioned during pretrial information said that “at one point in time
the revenue share was 34 percent.” It wasn’t clear from the transcript whether
that percentage is the amount of revenue kept by Google or paid to Apple.
An attorney for Google objected to the information being
disclosed and attempted to have the judge strike the mention of 34 percent from
the record.
“That percentage just stated, that should be sealed,”
lawyer Robert Van Nest said, according to the transcript. “We are talking
hypotheticals here. That’s not a publicly known number.”
The magistrate judge presiding over the hearing later
refused Google’s request to block the sensitive information in the transcript
from public review. Google then asked Alsup to seal and redact the transcript,
saying the disclosure could severely affect its ability to negotiate similar
agreements with other companies. Apple joined Google’s request in a separate
filing.
‘Highly Sensitive’
“The specific financial terms of Google’s agreement with
Apple are highly sensitive to both Google and Apple,” Google said in its Jan.
20 filing. “Both Apple and Google have always treated this information as
extremely confidential.”
The transcript vanished without a trace from electronic
court records at about 3 p.m. Pacific standard time with no indication that the
court ruled on Google’s request to seal it.
The case is Oracle America Inc. v. Google Inc.,
10-cv-03561, U.S. District Court, Northern District of California (San
Francisco).
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