Google is paying Apple a large amount of money in order to have its search bar on the high-selling iPhone, according to recently published court transcripts. In a battle between Oracle and Google over the unpaid use of Java to develop Android, Oracle’s lawyers claimed in court that Apple received $1 billion for the privilege of being included in the iPhone’s search in 2014, among other intriguing details Google believes should have remained confidential.
Revealed during a hearing in federal court on January 14, Bloomberg reports the lawyer as claiming Google has a deal with Apple that offers a percentage of revenue generated by Google via Apple devices. The terms of the agreement were not directly disclosed, except for one Google witness interviewed before the trial mentioning “at one point in time the revenue share was 34 percent,” but it was unclear whether it was Google or Apple getting that figure.
Even this 34 percent figure is too much information for Google, as an attorney wanted the number stricken from the record. “That percentage just stated, that should be sealed. We are talking hypotheticals here. That’s not a publicly known number,” claimed Google lawyer Robert Van Nest. The magistrate judge refused the block, which Google followed up with a request to seal and redact the transcript, which Apple also joined in asking to be blocked from view. The transcript has since been removed.
The relatively high revenue from search is notable, considering previously comments made by Tim Cook about customer privacy. The Apple CEO has spoken out against companies such as Google that rely on customer data collection to serve optimal advertising a number of times, claiming in 2014 “Our business is not based on having information about you. You are not our product.” Last year, Cook addressed an event in a similar manner, declaring “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 Apple wants to be.”
While Cook has repeatedly stressed it does not perform data collection or manipulation like its rivals for its products and services, the receiving of a cut of advertising revenues from Google may irk some observers.
Another item brought up in the same Oracle disclosure is how little Google earns from Android. An attorney claimed Android brought in $31 billion in revenue to Google over its lifetime, generating a total of $22 billion in profit since 2008. By comparison, if not directly, iPhone sales in the fourth quarter of last year brought Apple $32.2 billion in revenue.
The figure is said by Google to have been derived from confidential internal financial documents, and requested it to be removed as part of the same sealing request. Google claims the “extremely sensitive information” was included in documents marked as “Attorney’s Eyes Only,” meaning it shouldn’t be provided to other sources. “Google does not publicly allocate revenues or profits to Android separate and apart from Google’s general business,” advised the search giant. “That non-public financial data is highly sensitive and public disclosure could have significant negative effects on Google’s business.”
The main case itself deals with Oracle’s assertion that Google used its Java software in the creation of Android, but without paying the company. It is attempting to use the financial information from Google to demonstrate it has earned a profit from the software, and the higher the earnings, the higher the amount Oracle can claim it is owed in damages. Oracle has already expanded its claims to cover more recent versions of Android, and is likely to seek more than $1 billion in redress.
