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

Google paid Apple $1 billion (£701.36 million) in 2014 to be the default search provider on iOS devices, including iPhones and iPads.

A Bloomberg report, citing a transcript of court proceedings from a copyright lawsuit filed by Oracle against Google, revealed details of the deal between the two Silicon Valley tech giants.

The agreement involves Google paying Apple as much as 34% of revenue generated via iOS devices.

Chris Green, a technology analyst at consultancy firm Lewis, was quoted by the BBC as saying:

“It’s a very lucrative business to be the browser of choice on a device or the search engine on a device. It really does, I think, highlight the importance that’s being put on being able to own real estate and the conduits through which people access information.”

Google and Apple have both been asking the court to reconsider an earlier decision to not seal the transcript.

Leslie Fithian, the senior director of the software products legal team, said the following in Apple’s Jan. 20 declaration of support for Google’s motion to seal.

“This information is considered confidential and commercially sensitive,” he said.

“Apple does not disclose this information to the public. Moreover, Apple restricts knowledge of this information to only a subset of Apple employees on a need-to-know basis.

“If this information is disclosed … third parties seeking to negotiate terms of a business relationship with Apple might leverage this information against Apple, thereby forcing Apple into an uneven bargaining position in future negotiations,” Fithian added.

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Oracle is suing Google for using its Java software for the development of the Android OS without paying for its use.

The lawsuit filed by Oracle is accusing Google of using its Java software for the development of its Android operating system (OS).

Android released in September 2008.

Since its release the OS has generated profit of $22 billion on revenue of approximately $31 billion, an Oracle lawyer disclosed in a recent court hearing.

Atlantic Equities analyst James Cordwell was quoted by Reuters as saying:

“Assuming Android has only generated material revenue since 2010, then these figures would constitute about 10 percent of Google’s revenue and 15 percent of its gross profit since that time,”

“This makes sense given mobile is probably about 40 percent of Google’s revenue today, having ramped up from close to zero over the last 5-6 years, with this split between iOS and Android,” he added.

Apple and Google declined to comment on the issue.