Apple and Google’s $20 billion deal, which sees Google serve as the default search engine on the iPhone, is under scrutiny. As we reported this morning, the United States DOJ is continuing its case against Google’s dominance in the search industry – and that lucrative Apple agreement is a focal point.
In a new court filing this week spotted by Reuters, Eddy Cue, Apple’s Senior Vice President of Services, outlined why Apple itself would never develop its own search engine.
Cue explains that the court believes the proposed remedies in the Google case would lead Apple to “develop its own search engine or enter the Search Text Ad market” and compete with Google’s dominance. Cue, however, says “that assumption is wrong.”
Here are Cue’s reasons as to why Apple will never make a search engine:
- “Apple is focused on other growth areas. The development of a search engine would require diverting both capital investment and employees because creating a search engine would cost billions of dollars and take many years.”
- “Search is rapidly evolving due to recent and ongoing developments in Artificial Intelligence. That makes it economically risky to devote the huge resources that would be required to create a search engine.”
- “A viable search engine would require building a platform to sell targeted advertising, which is not a core business of Apple. Apple does not have the volume of specialized professionals and significant operational infrastructure needed to build and run a successful search advertising business. Although Apple does have some niche advertising, such as on the App Store platform, search advertising is different and outside of Apple’s core expertise. Building a search advertising business would also need to be balanced against Apple’s longstanding privacy commitments.”
Also this week, Reuters reports that Apple “has asked to participate in Google’s upcoming U.S. antitrust trial over online search.”
“Google can no longer adequately represent Apple’s interests: Google must now defend against a broad effort to break up its business units,” Apple said in a filing.
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