Google 'paid Apple $1bn to be iPhone search engine'

US court documents said to reveal high cost of partnership

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(Image credit: 2008 Getty Images)

Google paid $1bn (£700m) to rival tech company Apple in 2014 to remain the default search engine on iOS devices, Bloomberg reports court papers as saying.

The fee is said to have been discovered on a transcript of proceedings from a copyright lawsuit Google is fighting against Oracle Corporation in the US.

According to the documents, Apple also received a percentage of the revenue Google generates from being the default option on the devices.

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"Rumours about how much Google pays Apple to be on the iPhone have circulated for years, but the companies have never publicly disclosed it," says Bloomberg.

It also reports a witness telling the court that at one stage, Apple received as much a 34 per cent of Google's iPhone and iPad-based income.

Bloomberg claims that Google's legal team then ordered that "highly sensitive" disclosure be struck from the records, as public knowledge of how much the company paid could severely hamper future negotiations.

The magistrate judge refused and both Google and Apple filed individual requests for the transcripts to be redacted, it adds.

While the outcome of the suits was not known, Bloomberg then says the court documents they saw had been removed from the internet.

"It's a very lucrative business to be the browser of choice on a device or the search engine on a device," Chris Green, a technology analyst at consultancy firm Lewis, told the BBC.

The Verge weighs in on the issue by citing what now seem to be accurate reports in the past from Morgan Stanley and Macquarie Capital suggesting a $1bn fee for search-engine placement on Apple devices. But they add that these claims were made in 2012 and 2013 and "if anything, it's more of a surprise that Apple's rates haven't significantly changed over the years as iPhones have increased in sales, rising from the $1 billion indicated four years ago".

Last year, Recode reported that Yahoo was interested in taking Google's place as the default search engine on iOS devices, but whether they could "build adequate mobile search technology to satisfy Apple’s exacting standards" left doubt surrounding that rumour.

Both Apple and Google declined to talk to Bloomberg.

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