Eddy Cue, Apple's senior vice president of services, testified in a federal court in Washington, D.C. on Tuesday that having Google as the default search engine on iPhones provided the best outcome for consumers due to the lack of viable alternatives. Cue, who was the company's main representative in negotiations of its multibillion-dollar deal with Google, offered insight into aspects rarely discussed in public.On Tuesday, Eddy Cue, Apple's senior vice president of services, testified in federal court in Washington, D.C. that the company selected Google as the default search engine on iPhones due to the fact it was best suited to what consumers wanted and "there was no valid substitute." Discussing the multibillion-dollar agreement between the two firms, Cue's statement shed light on the seldom-mentioned parts of the deal. He mentioned that in terms of the alternatives presented, Apple provides some customers have never heard of, which poses a challenge of making the wrong selection. Bernstein have estimated that Google will pay Apple up to $19 billion in revenue this year from the agreement, although the precise details remain undisclosed. It was observed that during Cue's 2016 discussion with Google CEO Sundar Pichai to revise the Information Services Agreement, one of his objectives was to attain a higher revenue share percentage from Google for Apple.
Cue stated that it was the "right thing and the fair thing" for them to raise the revenue sharing percentage. According to him, Apple had created the technology and thus "deserved" to receive a higher profit. During his trial, Meagan Bellshaw, the Justice Department attorney, reminded him of an email he had sent to Apple CEO Tim Cook in 2016 following his meeting with Pichai about the contract. Cue had mentioned that the discussion surrounding the revenue share wasn't going in their favor and that Pichai wasn't ready to agree to the C percentage they were asking for. Consequently, he proposed his boss to have a private talk with Pichai to establish the required financial terms and confirm the deal. Even though he admitted to not seriously considering what would happen if the agreement did not pass, he was determined that both firms needed to come to terms. In the end, the two sides agreed to a revenue sharing percentage which was different from their initial proposals and the contract was renewed in 2021. In addition, the DOJ inquired whether the agreement contained a clause that would force Apple to support and defend it in the event of any governmental action. Cue confirmed there was such a clause but he wasn't familiar with its details, only that Google had asked for it during one of its investigations in Europe and that Apple's legal staff had said it was ok.
The Department of Justice questioned Cue on how Apple decides where and how to provide users with the option to customize their iPhones. One proposed solution would be to give consumers the ability to evaluate their search engine options in an impartial manner. Cue's testimony described how this approach could be difficult for customers, expressing that when users activate a new device, they want it to be quick. Prompting excessive choices would only frustrate them, thus why when they initially power on their iPhone, they are only asked to select a few preferences, such as font size. However, offering choices for appearance settings is different from selecting a search engine, which Apple handles differently in different countries. In places around the world where Google is the optimal experience, Apple has selected it as the default status. Nonetheless, Cue reiterated Apple's disapproval of Google's privacy practices, such as Google's ability to track users on iPhones and forcing people to log in to use the search engine. He also showed a slide deck titled "Competing on Privacy" to Apple CEO Tim Cook in January 2013, which included a headline about Google's $22.5 million settlement with the Federal Trade Commission over improper tracking on Apple's Safari browser. Cue maintained that Apple's iPhone is a more private device than Google's Android mobile operating system. Google declined to comment. Across examination, Cue affirmed that integrating search into the browsing product out of the box is advantageous for Apple as it was Steve Jobs' original concept when introducing the iPhone. Apple was first to allow users to search the web directly from the address bar, which later became popular with other browsers. Instead of permitting search engines to continuously notify customers that they could alter their defaults, Apple stopped this process in order to create a better consumer experience. Cue said users can change their default search engine if they know how to manage Wi-Fi.
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