In what is sure to be a problem for both companies, an alleged secret non-compete agreement has come to light involving Chrome on iOS.
According to The Register, Google pays Apple a portion of the revenue it receives from searches in the iOS version of its Chrome web browser. This arrangement is above and beyond what Google pays Apple to be the default search provider on the iPhone and iPad.
The UK’s Competition and Markets Authority (CMA) issued a 356-page report in mid-June 2022 detailing the relationship between Google and Apple. Below is an excerpt from that report:
Google pays Apple a share of the search revenue it earns from browser traffic on iOS in the following contexts: in return for being the default search provider on Safari, Google pays Apple a share of revenue derived from Safari search traffic; and pursuant to various commercial arrangements, Google pays Apple a share of revenue derived from [x] search traffic.
The Register’s sources have told the outlet that the redacted “x” in the above text stands for “Chrome.”
Such an arrangement would be relatively unusual since Apple doesn’t actually do anything worthy of receiving a portion of Google’s Chrome search revenue. A clue to the reasoning behind the deal may rest in a private antitrust lawsuit brought against both companies by the Alioto Law Firm in San Francisco.
“Because more than half of Google’s search business was conducted through Apple devices, Apple was a major potential threat to Google, and that threat was designated by Google as ‘Code Red,'” the complaint argues. “Google paid billions of dollars to Apple and agreed to share its profits with Apple to eliminate the threat and fear of Apple as a competitor.”
The Register reached out to attorney Joseph M. Alioto, who was not surprised by this report. He did, however, point out the legal issues if such a secret non-compete agreement truly exists.
“The division of the market is per se illegal under the antitrust laws,” said Alioto.
If The Register’s sources are correct, and the two companies have colluded to the degree reported, it could be exactly the smoking gun regulators need to take more definitive action against Apple and Google specifically, as well as Big Tech in general.