Apple's Eddy Cue to Testify in DOJ's Google Trial, Defending Google Default Search Deal

Eddy Cue, Apple Inc's AAPL Senior Vice President of Services, is set to testify in federal court as part of a case brought by the U.S. Department of Justice (DOJ) against Alphabet Inc GOOG GOOGL Google

The DOJ alleges that Google is monopolizing online search through licensing agreements, and one of the critical deals under scrutiny is the one where Google pays Apple up to $19 billion in 2023 to be the default search engine on iPhones and other devices, as Bernstein estimates.

Cue, who negotiated this deal with Google from Apple, is expected to testify that Apple chose Google as the default search engine because it was the best product available, CNBC cites familiar sources. 

He will also argue that Apple has no incentive to create its search engine since Google already offers a high-quality service. 

Cue will highlight that Apple has revenue-sharing agreements with competing search engines like Yahoo, Microsoft Corp MSFT Bing, DuckDuckGo, and Ecosia. 

Additionally, Apple users have the flexibility to change their default search engines.

The DOJ argues that Google's exclusive agreements with mobile phone makers and browser companies, including Apple and Samsung Electronics Co, Ltd SSNLF, create barriers to entry for competing search engines and hinder meaningful competition. 

Google initiated these agreements in 2001, offering revenue-sharing when users click on ads. Apple began licensing Google's search engine for its Safari web browser in 2003. 

In 2005, Google proposed sharing advertising revenue with Apple in exchange for making its search engine the default on desktop computers.

The trial provides a glimpse into Google's practices as it maintains its nearly 90% share of the online search market, contributing significantly to its parent company Alphabet's revenue.

Apple recently highlighted a subtle shift in the recent iPhone software update, allowing users to opt for a search engine other than Google's while using the internet in private mode.

Price Action: GOOG shares traded lower by 2.45% at $128.93 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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