Google has been alleged with one of the biggest antitrust allegations so far by the Department Of Justice (DOJ), US. Let’s take a look into it and understand the collusion between Google and Apple.
Crux of the Matter
The Department of Justice (DOJ) has claimed that Google has been paying $8 billion to $12 billion since 2017 to be the default search engine for iPhone and its services like Siri. The DOJ further alleged that Google and Apple work on the agreement as “one company”.
Mobile Safari is a web browser designed by Apple for iPhones. According to the 2014 court documents, Google paid $1 billion to secure the default position on the browser in the US. Due to the arrangement, the iPhone plays a major role in generating revenue for Google’s mobile advertisement business, which gives Google an edge over the competition.
Allegations Against Google
Regulators have shown concern over Google’s pay for US placement, as it was 50% higher than what was paid six years ago. This increment may be done to curb the competition. Other browsers like, Microsoft’s Bing and DuckDuckGo, may not be able to pay a similar amount for prime placement, which gives an unfair advantage to Google.
The senior vice president of Global Affairs, Google, Kent Walker responded against the allegations and called the case deeply flawed.
Walker further argued that their agreement is similar to other traditional company agreements.
- An oligopoly is a market form wherein a market or industry is dominated by a small group of large sellers. Many business and tech gurus believe that this group of major tech giants is an oligopoly, coming to dominate the online market through anti-competitive practices, ever-increasing financial power, and intellectual property law.
- BATX stands for Baidu, Alibaba, Tencent, Xiaomi, the acronym for the four biggest tech firms in China, counter-standing by GAFA (Google, Amazon, Facebook, Apple) in the United States. BATX are few of the first tech companies started in the 2000s, in the rise of Chinese tech revolution and became widely used among Chinese netizens.
- In 2002, Yahoo had the chance to buy Google for $1 billion, but executives dragged their feet; by the time they decided to pursue the offer, Google’s price had soared to $3 billion. In the late ’90s, search was only generating six percent of Yahoo’s income stream, and the company believed it was not worth improving.