For quite some time now, people have wondered how it is possible that iPhones have a Google search bar on them. After all, Apple and Google are pretty big competitors, so it has always been a bit of a puzzle for many.
Federal Court Revelations
It now appears that the puzzle has been solved. We now know that Google Inc. has agreed to pay Apple Inc. a very substantial sum of money in order to keep that search bar on iPhones. Newly released documents show that Google paid its rival $1 billion in 2014. This was revealed in the court proceeding transcripts of the copyright lawsuit that Oracle Corp. has launched against Google. It revealed that an agreement is in place between Apple and Google, which gives the iPhone manufacturer a percentage of the revenue that is generated by Google through any Apple device. This was made public in federal court on January 14, by an Oracle attorney.
For years, people have speculated that Google must have been paying Apple for this. However, this has been neither confirmed nor denied, until now. And, while many people were certain that it must be true, nobody knew the amounts that were involved. Neither company had ever made any kind of public disclosure about this. In fact, this continues to this day, as both Google and Apple did not want to send any spokespeople forward to comment on the federal court disclosures.
Reactions to the Disclosures
The agreement on revenue sharing is now public, however, and it clearly demonstrates just what Google had to do in order to be able to keep the search bar on iPhones and other such mobile devices. Also, it shows that there is a significant financial benefit in place for Apple as well. Because the entire business model that Google operates on is based on advertising, Apple wanted a piece of the pie. It is not surprising, when you think about it, that the model has been criticized by some people, including Apple’s Chief Executive Officer Tim Cook, as being nothing short of an intrusion of privacy.
I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information. They’re gobbling up everything they can learn about you and trying to monetize it. We think that’s wrong. And it’s not the kind of company that Apple wants to be.
The Oracle Lawsuit Against Google
The lawsuit between Google and Oracle first started in 2010. It was in relation to Oracle’s claim that Google used Oracle’s Java software without actually paying for this, and that they used it in order to create Android. The case has been going backwards and forwards for the past five years and it doesn’t look like it will end soon. It is now back with U.S. District Judge William Alsup, presiding in San Francisco. Before that, it was at the U.S. Supreme Court, where Google made an unsuccessful attempt at derailing the lawsuit. Oracle is now seeking damages in excess of $1 billion because its claim has now been expanded to cover the new versions of Android as well.
At issue in Oracle v. Google is whether Oracle can claim a copyright on Java APIs, and if so, whether Google infringes these copyrights. When Google implemented the Android OS, Google wrote its own version of Java. But in order to allow developers to write their own programs for Android, Google’s implementation used the same names, organization, and functionality as the Java APIs.
The details about the agreement between Google and Apple were disclosed by Annette Hurst, who works as an attorney for Oracle. She also added details about the amounts in revenue shares, as declared to her by a Google witness who, during pretrial information, had been interviewed.
According to one Google witness in the trial, “at one point in time the revenue share was 34 percent.” We don’t know whether this comment refers to Google’s split or Apple’s split. But what we do know is that the figure is likely to be accurate, as both Apple and Google have attempted to have the quote struck from public record.
Apple and Google’s Reactions
In fact, that statement is causing a great deal of controversy. Apple and Google are suddenly working together even more closely in expressing their outrage at the fact that the details have now been made public. Of course, the reality is that even if they do manage to have these details struck off, they are now out there in the open, and everyone already knows about them. While it is true that no decision may have been made by a judge based on those figures, the damage has already been done in terms of Google and Apple’s reputation. Nevertheless, Google lawyer Robert Van Nest continues to fight it.
That percentage just stated, that should be sealed. We are talking hypotheticals here. That’s not a publicly known number.
However, the judge who presided over the hearing did not agree to honor Google’s request and believed the information, while sensitive, should remain part of the public review transcripts. In response, Google requested that Judge Alsup redact and seal the transcript instead. They requested this because they believed that they would no longer be able to negotiate similar deals with different companies should the percentage information become publicly known. Apple joined in at this point, requesting a separate filing. In the January 20 filing an official request for sealing was recorded.
The specific financial terms of Google’s agreement with Apple are highly sensitive to both Google and Apple. Both Apple and Google have always treated this information as extremely confidential.
Transcript No Longer Available
Interestingly, at around 3pm Pacific Standard Time, the transcript vanished and was no longer found in electronic court records. While this likely means that the court has agreed to seal the records, no official statement has been noted about this. The case, which is Oracle America Inc. v. Google Inc., 10-cv-03561, U.S. District Court, Northern District of California (San Francisco), remains open for now.