As reported by Bloomberg, Microsoft has been attempting to replace Google with Bing as the default web browser on iPhones. Still, Apple has never seriously considered making the switch. Microsoft executive Mikhail Parakhin, CEO of Advertising & Web Services at Microsoft, believes that Apple is making more money from Bing’s existence than Bing itself.
Microsoft is still trying to convince Apple to switch to Bing but has not progressed. In his testimony during the US government’s antitrust trial against Google in Washington, the Microsoft executive says it is uneconomical for them to invest more in technology for the mobile search market unless they get a more significant or firmer distribution guarantee from Apple.
Apple has been using Google as the default search engine in its Safari browser since 2003. In return, it receives a share of the advertising revenue from searches on its devices. According to him, Apple strategically deploys Microsoft’s Bing as a “bargaining chip” during negotiations with Google, emphasizing its value in partnership discussions.
The US Justice Department alleges that this contract and others like it have allowed Google to maintain its monopoly over the online search market illegally. Google denies the government’s claim and says users choose its search engine because it is the best one.
Apple’s earnings from its Google deal are confidential but estimated to be between $4-7 billion yearly by the Justice Department. This points to Apple’s significant market power in the smartphone industry, evident by Google paying billions to be the default iPhone search engine.
On Tuesday, a top Apple executive testified that the iPhone maker agreed to “support and defend” the contract with Google in any regulatory challenges, including the Justice Department’s lawsuit.
It highlights that Apple’s dominance in controlling the distribution of search engines on its iPhones acts as a major hurdle for competitors. Microsoft is willing to invest more in technology for the mobile search market, but only if it receives a stronger distribution guarantee from Apple.
In addition to these conclusions, we can infer that Apple and Google have a cozy relationship. The fact that Apple has agreed to “support and defend” its contract with Google in any regulatory challenges suggests that the two companies are aligned in their desire to maintain the status quo.
The outcome of the Justice Department’s antitrust lawsuit against Google could have a major impact on the online search market. If Google is found to have illegally maintained its monopoly, it could be forced to change its business practices and make it easier for competitors like Microsoft to compete.
