Apple defends Google Search deal in court: ‘There wasn’t a valid alternative’


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Is it too hard to find your Safari settings on the iPhone? Does Google deserve to be the default, or does it just pay to be? Eddy Cue was asked all that and more.

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Apple Executive Eddy Cue To Testify In Government’s Case Against Google In D.C.

Photo by Chip Somodevilla / Getty Images

Eddy Cue, in a dark suit, peered down at the monitor in front of him. The screens in the Washington, DC, courtroom had briefly malfunctioned and left witnesses with only binders, but now the tech was up and running — showing an image of three iPhones, each demonstrating a part of the phone’s setup process. Cue squinted down at the screen.

“The resolution on this is terrible,” he said. “You should get a Mac.” That got some laughs in an otherwise staid and quiet courtroom. Judge Amit Mehta, presiding over the case, leaned into his microphone and responded, “If Apple would like to make a donation…” That got even bigger laughs. Then everybody got back down to business.

Cue was on the stand as a witness in US v. Google, the landmark antitrust trial over Google’s search business. Cue is one of the highest-profile witnesses in the case so far, in part because the deal between Google and Apple — which makes Google the default search engine on all Apple devices and pays Apple billions of dollars a year — is central to the US Department of Justice’s case against Google.

Cue had two messages: Apple believes in protecting its users’ privacy, and it also believes in Google. Whether those two statements can be simultaneously true became the question of the day.

Apple is in court because of something called the Information Services Agreement, or ISA: a deal that makes Google’s search engine the default on Apple’s products. The ISA has been in place since 2002, but Cue was responsible for negotiating its current iteration with Google CEO Sundar Pichai in 2016. In testimony today, the Justice Department grilled Cue about the specifics of the deal.

When the two sides renegotiated, Cue said on the stand, Apple wanted a higher percentage of the revenue Google made from Apple users it directed toward the search engine. Discussion of specific numbers was reserved for closed court sessions, but Cue wanted Apple to get a higher percentage, while Pichai wanted to keep the deal as it was. They eventually compromised on some other number we weren’t told in court, and Google has been paying Apple that amount since.

Meagan Bellshaw, a Justice Department lawyer, asked Cue if he would have walked away from the deal if the two sides couldn’t agree on a revenue-share figure. Cue said he’d never really considered that an option: “I always felt like it was in Google’s best interest, and our best interest, to get a deal done.” Cue also argued that the deal was about more than economics and that Apple never seriously considered switching to another provider or building its own search product. “Certainly there wasn’t a valid alternative to Google at the time,” Cue said. He said there still isn’t one.

That question — whether Apple picked Google because it’s the most lucrative choice or the best product — was a key part of Cue’s testimony and, in fact, a key part of the DOJ’s entire case against Google. The Justice Department is focused on the deals Google makes — with Apple but also with Samsung and Mozilla and many others — to ensure it is the default search engine on practically every platform. 

Bellshaw asked Cue a number of questions about the iPhone setup process. Those three screenshots showed the Appearance screen that shows up when you first boot up your iPhone so you can pick font sizes; the location-tracking prompt that appears when you open Maps; and the App Tracking Transparency pop-up that tells you when an app wants to collect your data. Cue objected to all these things being considered part of setup, but Bellshaw’s point was that Apple offers its users a choice about lots of things, big and small, and that search could be one of them. 

Cue acknowledged that the ISA didn’t allow Apple to offer users a choice of search engines during setup but also said he wouldn’t want to do that anyway. “We try to get people up and running as fast as possible,” he said. “Setup is just critical stuff.” Showing people a bunch of search engines they’ve never heard of would just be a bad user experience, he argued; even Cue couldn’t remember the names of some of the alternatives to Google. “We make Google be the default search engine,” he said, “because we’ve always thought it was the best. We pick the best one and let users easily change it.” (“Easily” is a persistent point of contention in this trial — DuckDuckGo’s CEO, who testified last week, claimed it takes “too many steps” to switch.)

As for the privacy pop-ups? This is where Bellshaw began to press on how exactly Apple decided Google had the best product. She asked Cue if Apple believes user privacy is important, to which he said, “Absolutely.” Then, she showed a series of emails and slides in which Cue and Apple railed against Google’s privacy policies. Cue readily agreed. “We’ve always thought we had better privacy than Google,” he told Bellshaw. He said that one provision of the ISA with Google was that Google had to allow people to search without logging in and that Apple has done things in Safari and around its platforms to make it harder for Google or anyone else to track users.

Bellshaw never quite said it, but the DOJ’s implication seemed to be that, essentially, Google is a privacy menace anathema to everything Apple believes is important to its users, but Apple gives it a central place in its platform because Google pays it so handsomely. Bellshaw asked Cue to review some of Apple’s financial filings. Isn’t it true that the ISA represents a significant portion of Apple’s profits, she asked? Cue said that’s not how Apple looks at it because it doesn’t account for all the work Apple did to make its platform so appealing that an agreement like this could work as well as it does. 

Later, after a closed session in the courtroom and a break for lunch, Google lawyer John Schmidtlein led Cue through a history of the Google / Apple partnership, and a history of the Safari browser. Cue noted that Safari’s combination of URL and search bar was a user interface innovation, and the seamless Google integration was part of what made it work. In early promotional materials for Safari, Schmidtlein pointed out, the Google integration was nearly always mentioned.

“Before 2003,” Cue said, “the way that you searched the web was you had to go in and you had to type in in the URL field, or you could type in another URL. We came up with the idea that if you type anything in the URL field that’s not a URL, it just goes to search.”

Schmidtlein’s overall point was that Google helped Safari succeed not by forcing Apple’s hand, but by being a great product that integrated seamlessly with Apple’s own stuff. He referenced Apple’s deals with Yahoo and Bing that make those services easy to find, and both men argued that switching search engines is so easy as to be a non-issue. Bellshaw briefly stepped up to rebut that notion, and that was it for Cue’s testimony.

At least, that’s all the testimony we saw. Like so many things in this trial, the star witness was kept mostly under wraps thanks to complaints and worries about revealing confidential numbers and corporate secrets. But the questions put to Cue were the same ones the DOJ is going to keep asking: is Google really the best search engine, or is it just the one writing the biggest checks? And if those checks went away, what would the search engine market look like? Cue said Apple’s never really thought about it. Google said Apple would be silly to do so. And the Justice Department thinks it’s about time Apple starts doing so.

Update September 26th, 3:32PM ET: Added information on the remainder of Cue’s testimony.

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