Report indicates Google paid Apple $1 billion to be the default search engine on iOS devices

In a rare showing of two tech rivals agreeing to terms with one another — outside of a courtroom, that is — Google is said to have paid Apple $1 billion in 2014 to be the default search engine on all iOS devices.

Details of this agreement showed up in a courtroom transcript from a copyright lawsuit against Google. Specifically, it’s a $1 billion lawsuit filed by Oracle Corporation in 2010 that claims Google used its Java software to develop Android, but never paid for it. 

Also detailed was Google agreeing to pay Apple a percentage of revenue gained through iOS devices.

Both companies declined to comment. 

Per the transcript, it was an Oracle attorney that disclosed details of the deal between Google and Apple. Specifically referenced was a Google witness who stated that at one point the revenue share between the two companies was 34%. What wasn’t made clear was whether this percentage was the amount that Google got to keep, or that which the company shared with Apple. Due to the hypothetical nature of the number, a Google attorney tried to have it stricken from the record.

“That percentage just stated, that should be sealed,” lawyer Robert Van Nest said, per the transcript. “We are talking hypotheticals here. That’s not a publicly known number.”

The judge presiding over the case — U.S. District Judge William Alsup — refused Van Nest’s request. The attorney then requested that the judge seal and redact the transcript on grounds that the information could affect Google’s ability to negotiate similar agreements with other companies. Apple apparently joined Google’s request in a separate filing. 

“The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple,” Google said in its Jan. 20 filing. “Both Apple and Google have always treated this information as extremely confidential.”

According to Bloomberg, the transcript suddenly vanished from the court’s electronic records at about 6PM EST with no indication from the court that it had ruled in Google’s favor to seal the documents. 

Now, it’s worth noting that the $1billion agreement between the two companies has been floated around before — what makes it particularly newsworthy now is the fact that this marks the first instance in which the figure’s actually been formally documented, albeit a temporary documentation. 

For those curious about the 34% figure, the agreement to share revenue is nothing out of the ordinary — it’s actually pretty standard for companies to pay hardware vendors a certain fee for the placement of software on devices; more often than not, this charge comes in the form of a percentage of revenue gained as a result of the placement.

To follow the Oracle vs Google case, reference 10-cv-03561, U.S. District Court, Northern District of California (San Francisco).

Via Bloomberg