Google pays Apple 36% of the revenue it earns from searches in Safari

Original Article ↗ Hacker News Discussion ↗

Google is revealed to pay Apple 36% of the search advertising revenue generated through Safari, a figure that highlights how valuable default placement on iOS is to Google’s ad business. Commenters debate whether this revenue-sharing deal is anti-competitive or just a standard distribution arrangement, focusing on how defaults shape user behavior, suppress potential rivals, and may have discouraged Apple from building its own search engine. The arrangement also raises questions about Apple’s privacy-centric marketing, the true cost of customer acquisition in digital markets, and what remedies—such as mandatory choice screens or breaking the deal—might look like in ongoing antitrust actions.

Nature of the Deal & Headline Clarification

  • Deal is 36% of Safari search ad revenue, not 36% of all Google revenue.
  • Some note the headline is easy to misread as “36% of all Google revenue,” which changes the perceived magnitude.

Antitrust, Legality & Role of Defaults

  • Central question: is paying to be the default search on iOS an illegal use of monopoly power, or just a standard distribution deal like historic AOL or TV sports contracts?
  • Some argue defaults “obviously” matter greatly; others say people often change them (e.g., Chrome vs IE), so the impact is overstated.
  • Several point out that it’s not illegal to have a monopoly or exclusive deals per se—only to use them to block competition; that’s exactly what the trial is meant to determine.

Impact on Competition & Apple’s Incentives

  • Payment is seen as both:
    • A way to keep iOS search traffic away from rivals like Bing/DDG.
    • An incentive for Apple not to build or acquire its own search engine.
  • Some suggest Apple would otherwise either: sell default status to another bidder, or develop its own search (as with Maps).
  • Concern that such payments make it impossible for new entrants to compete on quality alone.

Economics of the 36% Cut

  • Debate over whether this is “customer acquisition cost,” a “tax,” or simply a marketing/distribution expense.
  • Some say 36% of revenue (not profit) is huge; others note that for high‑margin ad businesses this can still be rational.
  • Observation that iOS users are wealthier and more lucrative; losing them could reduce not just traffic but ad auction prices and advertiser loyalty.

Apple’s Platform Power & Privacy Image

  • Several see this as evidence of the value of Apple’s platform control and question why Apple’s not also under antitrust fire.
  • Tension noted between Apple’s privacy marketing and the reality of taking a large cut from a data‑driven ad company.
  • Some argue Apple “launders” data monetization by letting Google collect and simply taking money.

Search Quality & Alternatives

  • Mixed views: some say Google search quality has degraded and alternatives like DDG, Bing, Kagi, Brave, or even chatbots are now competitive or better; others still see Google as clearly superior, especially for complex queries and shopping.
  • Regional variation reported (e.g., DDG seen as weak outside the US by some, fine in places like New Zealand by others).

Trial Process & Leak

  • The 36% figure was supposed to be confidential and its public disclosure is seen by some as damaging to Google’s position and bargaining power.
  • Others note it was always evidence in the case; the “leak” mainly affects public and counterparties’ knowledge, not the court’s.