May 19, 2024

Apple & Microsoft 2020 Deal Key to Antitrust Trial Against Google

In a surprising revelation, Microsoft and Apple were reportedly in discussions around 2020 about a potential deal involving Bing, Microsoft’s search engine.

The deal, if successful, would have seen Bing replacing Google as the default search engine on Apple’s devices, a move that would have significantly reshaped the search engine landscape.

Bing currently accounts for less than 10% of searches, a stark contrast to Google’s dominance in the search market.

Microsoft executives and Eddy Cue, the head of Apple services, engaged in preliminary talks about the possibility of selling Bing to Apple. These discussions, however, never progressed to advanced stages.

Bloomberg, citing anonymous sources, reported that the talks were exploratory in nature, revealing the confidential and significant nature of the discussions.

Apple and Google have had a longstanding deal since 2002, which has evolved over time to include new devices like the iPhone. Google currently pays Apple approximately $15 billion annually to maintain its status as the default search engine on over a billion Apple devices globally. This deal has been lucrative for Apple, bringing in substantial revenue each year.

Microsoft introduced Bing in 2009 to compete with Google but has struggled to gain substantial market share. Despite its challenges, Microsoft has explored various avenues to make Bing the preferred option, including potential deals and partnerships.

Antitrust Implications and Ongoing Trial

The deal between Apple and Google is now central to an antitrust trial against Google, where the Justice Department argues that Google’s dominance in the search market is unfair.

Executives from both Apple and Microsoft are testifying in the trial, with the Justice Department using the Apple-Google deal as evidence of Google’s unfair market dominance.

Eddy Cue defended the deal, asserting that Google is the best search option available and no other search engine is worthy of replacing it.

The substantial revenue from the Google deal was a crucial factor in Apple’s decision not to acquire Bing. Additionally, there were concerns about Bing’s ability to compete with Google in terms of quality and capabilities.

However, Apple integrated Bing in parts of its operations, such as Siri and Spotlight, between 2013 and 2017, before reverting back to Google as part of an updated revenue-sharing agreement.

The Potential Impact of a Bing-Apple Deal

Had the deal materialized, it is unlikely that Apple would have simply integrated Bing into its platform. Typically, Apple acquires underlying technology and resources from its acquisitions to build new features.

While the talks did not advance, they shed light on the strategic considerations and market dynamics influencing tech giants.

Eddy Cue emphasized that Apple sees no need to develop its own search tool as Google is clearly the best option, a stance that contrasts with Apple’s approach in other areas where it competes with Google, such as mapping software and voice assistants.

The exploratory discussions between Microsoft and Apple about a potential Bing deal underscore the dynamic and competitive nature of the tech industry.

The ongoing antitrust trial against Google and the revelations about the discussions between Microsoft and Apple highlight the intricate web of relationships and deals in the tech world, with significant implications for the industry’s future.

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