Class action lawsuit alleges Google pays Apple to stay out of the search engine market

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An antitrust class action lawsuit has been filed alleging that Apple and Google violated US antitrust laws in their dealings with each other, including the payments that Google’s search engine makes the standard for Apple products.

The lawsuit alleges that Google and Apple agreed that Apple would refrain from developing its own search engine in order not to compete with Google.

It also claims that there was a secret agreement that Google would share its search profits with Apple and that Apple would give Google preferential treatment on all Apple devices. Both companies are said to have worked together to suppress competition from smaller competitors and effectively drive them out of the search engine market. It also claims that because of the alleged collusion, advertising prices are higher than in a competitive system.

The lawsuit states that these agreements were made through regular secret meetings between Apple and Google executives.

The lawsuit aims to absorb the billions in payments from Google to Apple. She is also seeking an injunction banning the non-compete agreement between Google and Apple, the profit-sharing agreement, preferential treatment for Google on Apple devices, and the alleged payment by Google to Apple.

Finally, plaintiffs are calling for Google and Apple to be split into “separate and independent companies, following the precedent of splitting the Standard Oil Company into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron and others”.

The Standard Oil comparison is questionable. At the time of the Sherman Antitrust Act lawsuit, it controlled 91% of oil production and approximately 84% of ultimate oil and oil product sales in the United States. Apple has less than 50% of the cellular market in the US and less than 10% of the computer market.

In the past decade, there have been few documented face-to-face meetings between Apple and Google CEOs. Additionally, both Google and Apple say that the payments to Google as the default search engine on iOS are for just that, and users can choose other search engines if they want.

In addition, contrary to the allegation of the lawsuit, Apple has its own advertising business that it uses in the App Store. It also has its own internet search engine that it uses for Siri and Spotlight searches – just not internet accessible ones.