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:::tip United States of America v. Google LLC., Court Filing, retrieved on April 30, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 19 of 37.
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A. Google’s Apple Contract Is Exclusive
1. The ISA Locks Up Safari’s Default—The Most Important Search Access Point On Apple Devices
\ 728. Google views the Safari default position as of “paramount” importance. UPX0085 at -336; Tr. 1655:7–1657:4 (Roszak (Google)) (agreeing Safari default distribution is “important”). This single search access point accounts for approximately 28% percent of all U.S. general search queries. Tr. 5763:14–22 (Whinston (Pls. Expert)); UPXD104 at 36. Google pays Apple billions of dollars each year to ensure that Google is the only preset default search engine in this position across all devices and browsing modes, and in nearly every country. Supra ¶¶ 210, 223–224; infra ¶ 936.
\ 729. Apple does not preinstall any third-party applications, including any third-party web browsers, on its devices and does not foresee any scenario in which it would do so. Tr. 2455:4–2456:10 (Cue (Apple)) (“As I’ve said, from the very beginning, we haven’t done it, and I don’t see any scenario in which we would.”); Des. Tr. 92:15–18, 92:21–22 (Apple-EC 30(b)(6) Dep.) (There is nothing a third party could offer Apple to have an app preinstalled on Apple devices because Apple “would never do it.”).
\ Apple’s position is well known in the industry. Tr. 7667:20–7668:18 (Pichai (Google)) (Apple’s position against preinstalling third-party apps is common knowledge.); Tr. 10189:17–10190:5 (Murphy (Def. Expert)) (Apple does not preinstall third-party apps, and Google considers this fact when determining what revenue share to pay Apple.).
\ 730. Due in part to this policy, the Safari default is the most prominent and commonly used search access point on Apple devices. Approximately 80% of queries performed on iOS devices are performed on Safari. UPX0138 at -119 ("80% of iPhone searches are from Safari. Significant risk if default engine is changed."); UPX2051 at -519 (“How do users reach Google on iOS? Through Safari.”); id. (from 2017 to 2020, 81% of daily active users on iOS reached Google through Safari).
\ Most queries performed on Safari are entered into the Safari address bar and sent to the default GSE. UPX1050 at -894 (as of 2016, 65% of Google's queries from Apple devices were Safari default queries, and 13% were Safari non-default queries); Tr. 5714:5–14 (Whinston (Pls. Expert)) (“[T]he Safari default is responsible for the lion['s] share of queries on Apple devices… [it] really is where the vast majority of queries are being entered."); Tr. 2493:14–2494:13 (Cue (Apple)) (agreeing that the “vast majority” of Apple's revenue from Google comes from queries flowing through Safari rather than Google's Search App or Chrome).
\ 731. Relying on Safari is a "deeply ingrained habit" for Apple device users. UPX1049 at -232. Apple promotes this habit by setting Safari as the default browser and placing it in the hotseat on all Apple devices. UPX0138 at -130 ("Use[rs] prefer Safari because it is default[.] . . . Old habits dies hard."); UPX0139 at -151 (iPhone users with Safari on the app dock outnumber iPhone users with the Google Search App in the app dock about four-to-one, which "is a big advantage" for Safari).
\ 732. Maintaining its control of the Safari default is enormously important to Google. In 2015 and 2016, during negotiations to amend and extend the ISA, Google treated the risk that Apple would switch the Safari default to another search engine as a "Code Red" event: a serious issue requiring immediate response.
\ UPX0144 at -934 (“Code Red = DSE switch away from Google on iOS Safari"); Tr. 1616:20–1617:4 (Roszak (Google)); Tr. 1658:3–21 (Roszak (Google)) (discussing UPX0085 and Project Soy, an internal Google project to encourage iPhone users to be less reliant on the Safari default); UPX0085 at -228, -230, -240 (discussing the "Code Red Playbook" that Google would activate in the event of a Safari default switch); UPX0171 at -169, -177 ("Soy Code Red Plan" explaining that Google was "vulnerable" if Apple switched the Safari default); Tr. 536:10-537:21 (Rangel (Pls. Expert)) (discussing UPX0171 at -169, -177).
\ 733. If Apple switched the Safari default in 2016, Google expected to lose more than $28 billion in the following five-year period. UPX1050 at -887 (calculating net revenue losses between $28.2 billion and $32.7 billion if the Safari default switched); Tr. 1629:19-1631:18 (Roszak (Google)) (discussing UPX1050). Given the magnitude of this risk, Mr. Pichai, Google's CEO, became “extensively involved" in negotiating the 2016 ISA. Tr. 7659:15–20 (Pichai (Google)).
\ 734. The existence of bookmarks in Safari linking to other GSES does not undermine the power of the Safari default position and has not stopped Google from paying billions for it. To search through a bookmark, a user must open a new tab or page on Safari, click on the bookmark, arrive at the search engine's organic webpage, and enter the query on that webpage. Tr. 10101:19-21 (Murphy (Def. Expert)). Clicking on a bookmark does not change the browser's default search engine. Id. 10102:15–17. Instead, a user must perform extra clicks every time he or she conducts a search using a Safari bookmark. Id. 10102:18-24.
\ 735. In addition, Safari's bookmarks change as the device is used. The bookmarks appearing out-of-the-box are replaced by bookmarks for websites that a user frequently visits or has set as favorites, and these replacement bookmarks carry over when the user purchases a new device.
\ UPX0585 at -040 (“[W]hen existing customers enter their Apple account information on a new device, then the default bookmarks are replaced by others reflecting their favorites or history”); UPX0942 at -589 (“Favorite bookmarks in Safari are tied to a user’s iCloud account. If a user purchases a new iPhone or Mac and configures it with their iCloud account, the default bookmarks will be replaced by those associated with the account”).
\ 736. Google has been willing to pay billions for the Safari default position despite the existence of these bookmarks. Tr. 10102:25–10103:5 (Murphy (Def. Expert)) (Google was aware of Safari bookmarks when Google signed the current ISA).
\ 737. The existence of downloadable search apps also does not undermine the power of Safari’s default. To search from these apps, users must be aware that they can download them from the app store, make a conscious decision to do so, and undertake the download process. Des. Tr. 139:20–23, 140:1–24 (Baker (Mozilla) Dep.) (“[M]erely having an app in the app store is a very difficult way to compete with preloaded defaults” because “each person who gets that phone has to make a conscious decision and go through a lot of work to get your product.”); Tr. 617:23–618:17 (Rangel (Pls. Expert)) (The availability of rival search apps in mobile app stores does not undermine the power of Google’s search defaults because choice friction is still involved.).
\ As of 2018, more than 35% of iPhone users did not even know they could download the Google Search App. UPX0139 at -149. Of those that were aware that they could do so, the majority did not see a need and instead continued using Safari. Id.
\ 738. As Apple acknowledges, the process of finding and relying on downloadable search apps provides an inferior user experience compared to conducting searches on Safari. Tr. 2494:16–2495:23 (Cue (Apple)) (“In the Google Search app scenario, most people are sitting on a browser, they don’t really want to go search on an app or a different app from that standpoint”); id. 2496:6–10 (A downloaded search app does not provide as good an experience as the Safari browser.).
\ 739. Moreover, the ISA’s exclusive default requirement is not limited to Safari. If Apple ever launched another browser or any other “browser-like technology,” Apple would be required to preset Google as the only default search engine there as well. Supra ¶ 223.
\ 2. The ISA Prohibits Apple From Adopting Designs That Would Promote Choice In Search
\ 740. The ISA’s exclusive default requirement prohibits Apple from designing its products in ways that would promote competition. For example, Apple may not offer a choice screen, may not offer a different default in Safari’s private browsing mode, may not offer different defaults by device, and may not offer a different default in the United States versus the rest of the world. Supra ¶¶ 223–224; Tr. 5713:18–5714:4 (Whinston (Pls. Expert)) (discussing UPXD104 at 6).
\ 741. Apple has sought repeatedly to loosen these restrictions. Joan Braddi, Google’s partner advisor for Apple, noted during the parties’ 2013 negotiations that Apple’s “wants” included a “limited obligation and total flexibility,” while Google’s “wants” included a “[c]lear articulation of when we will be set as Default to be sure we are made whole; no direct or indirect payments from competitors if [Apple] offers/encourages the user to change settings. No offering users options during a search.” UPX0679 at .001.
\ This divergence in the companies’ “wants” has appeared repeatedly in their negotiations. Tr. 4977:13–17 (Braddi (Google)) (the disagreements reflected Apple’s “wish list”); Tr. 10023:23–10024:1 (Murphy (Def. Expert)) (when considering the competitive effect of a contract, the agreement’s history of negotiation can be important); id. 10024:7–11 (a party’s proposal shows what the party’s interests are, even if it doesn’t make it into the final contract).
\ a) Google Did Not Allow Apple To Offer A Choice Screen
\ 742. Google has long recognized that providing users with a choice screen to select their default search engine is good for both competition and consumers. When Microsoft introduced a new version of Internet Explorer in 2005 that would set Microsoft’s search engine as the default for most users, Google “proposed instead that users be prompted to select the default search provider the first time they use the inline search feature,” which would “eliminate[] any company’s own self interests and place[] control in the hands of the end user, where it belongs.” UPX0172 at -731. Google proposed such a choice screen because “most end users do not change defaults.” Id.
\ 743. At that time, Google believed that fairness required a dominant firm to offer users a choice screen to select their default search engine and that failure to do so would “harm the competitive process.” UPX0172 at -732; Tr. 7682:22–7684:2 (Pichai (Google)); id. 7686:1–6 (agreeing that “a choice screen would get closer to user preference” and that “Google believed that a choice screen had benefits for the user”); UPX0172 at -732 (By setting its own search engine as the default “Microsoft would gain a large number of search users for reasons having nothing to do with the merits of Microsoft’s search offering.”).
\ 744. In other contexts, Google has celebrated the adoption of choice screens. UPX2143 at -309–10 (Google 2010 email circulating Mozilla CEO Mitchell Baker’s blog post praising the EU’s implementation of a browser choice screen, which meant that Windows-PC users in Europe would be allowed to choose their default browser); id. at -308 (celebrating press coverage of the EU browser choice screen and projecting associated gains in Chrome usage); UPX2087 at -697 (Board of Directors document describing the EU’s implementation of this “browser ballot” as a “victory for users” and an “opportunity for Chrome”).
\ 745. Google’s affection for choice screens does not extend to the default search position in Safari. The ISA prohibits Apple from implementing a choice screen that would allow users to choose their default search engine. Supra ¶ 223 (Apple must set Google as the default search engine for all search queries performed in Safari.); Tr. 2476:2–2477:4 (Cue (Apple)) (ISA does not permit a choice screen for Apple users to set their default search engine out of the box); Tr. 5713:18–5714:4 (Whinston (Pls. Expert)) (discussing UPXD104 at 6).
\ 746. Apple routinely makes decisions on when to present users with choices. Tr. 2475:22–2476:1 (Cue (Apple)) (discussing UPXD009). When setting up their iPhones outof-the-box, users are presented a series of choice screens, including one for selecting text and icon size. Tr. 2471:22–2472:25 (Cue (Apple)) (discussing UPXD009). The first time Apple users open the Apple Maps app, they are presented with a choice screen to select their preferred privacy level when using that app. Tr. 2473:1–24 (Cue (Apple)) (discussing UPXD009). Under Apple’s tracking-transparency initiative, every app that wants to track a user’s data must provide a choice screen so the user can opt in or out of tracking. Tr. 2473:25–2475:7 (Cue (Apple)) (discussing UPXD009).
\ 747. In 2007, Apple considered introducing a version of Safari for Windows that would present users with a choice screen to select their default search provider. UPX1033 at -990 (“When an end user installs Safari on a system for the first-time, the end-user will be given the opportunity to select which Default Provider they would prefer,” including for the “[d]efault search setting in the Safari search field.”); id. at -990 (“I assume this would be during one of the following: the installation process, upon first launch of the browser, or on the download page.”). Apple discussed the Safari choice screen with Yahoo. UPX1034 at -992.
\ The Apple-Yahoo discussions progressed to the point that, in May 2007, Apple prepared and sent Yahoo a license agreement that would provide for Yahoo’s participation in the choice screen. Id. at -995 (draft agreement containing proposed term that states, “Apple agrees that when Apple distributes the Yahoo Search Settings in Apple Software pursuant to this Agreement, on first launch or set-up of such Apple Software, the Apple Software will provide a fair means for the user to choose the default search service that will appear to such user within the Apple Software.”). Yahoo reacted positively to Apple’s proposal, and on May 27, 2007, Yahoo told Apple that it hoped to finalize an agreement that included this language in the “coming week.” UPX1032 at -459.
\ 748. Just days later, Apple approached Google about amending the ISA to give Apple “sole discretion” to either make Google the default search engine or provide a user choice screen. UPX0677 at -121 (June 1, 2007 email attaching Apple’s “proposed amendment to the contract which allows end-users the option to choose their search default in Safari”); UPX0678 at -122 (draft amendment to ISA containing proposed term that states, “[o]n first launch or set-up of [Safari], Apple, in its sole discretion, may either make Google the default web search provider appearing within the Search box of the Software, or provide a means for the user to choose the default web search provider”).
\ 749. Google’s Executive Management Group—including Ms. Braddi, Mr. Brin, and Mr. Pichai—rejected Apple’s request to amend the ISA to allow for a choice screen. UPX0126 at -240 (June 4, 2007 presentation for Executive Management Group stating, “Current deals terms: Google default (and exclusive) search provider in Safari browser”; “What Apple wants: . . . Google to be one of two possible choices for search provider (not default); user required to choose search provider prior to using browser”); Tr. 7689:4–18 (Pichai (Google)) (discussing UPX0126 and agreeing that Apple was considering implementing a choice screen on Safari for Windows); UPX0137 at -688 (listing Brin, Braddi, and Pichai as attendees at Executive Management Group meeting).
\ Google rejected this request because “[d]efaults have strong impact” and it was “not going to pay for [a] non-default deal.” UPX0137 at -688–89 (“How much difference default status makes? *Typically 75% take rate.”). Instead, Google told Apple “no default, no rev share,” making clear this was a “take it or leave it” offer. UPX0137 at -689; Tr. 7691:19–7692:23 (Pichai (Google)) (The result of the EMG discussion in UPX0137 was to tell Apple: no default, no rev share.); Tr. 4984:11–18 (Braddi (Google)) (discussing UPX0072) (Google made a “take it or leave it” offer and Apple “took it”); UPX0072 at -216 (Google gave Apple two options: “1) No default placement - no revenue share on Safari/Windows. 2) Yes default placement – we will share in revenue under the current contract.”).
\ 750. The dispute regarding Apple’s ability to offer a choice screen on Safari for Windows reached the highest levels of both Google and Apple. Google co-founder Sergey Brin personally informed Apple CEO Steve Jobs that Google was “not interested in paying for nondefault.” UPX0561 at -263. In response to Google’s position that it would not pay for “nondefault,” Apple removed the proposed choice screen language from its draft agreement with Yahoo and replaced it with language permitting Apple to set another provider (Google) as default instead. UPX1035 at -127.
\ 751. Apple ultimately signed an extension of the ISA applying the agreement to Safari for Windows and requiring Apple to set Google as default on this new platform. JX0004 at -647– 48 (§§ 1, 5) (Apple ISA (2007 amend.)).
\ b) Google Did Not Allow Apple To Set An Alternative GSE As The Safari Homepage
\ 752. In June 2007, Mr. Pichai and Ms. Braddi became concerned by an iPhone demonstration that showed Yahoo as the homepage on Safari. UPX0672 at -475; Tr. 4989:21– 4991:3 (Braddi (Google)). Google realized that Apple had identified “something that wasn’t v
\ 753. Following the demonstration, Google sought to add new language to the ISA to prevent Apple from setting a search engine other than Google as the default homepage in Safari. Google sent Apple proposed contract language giving Google “the right to terminate the Agreement . . . if Apple provides a non-Google web search service in the default start page of [Safari].” UPX0604 at .003.
\ This proposal was intended “to address [Google’s] concern that [Apple] could add a start page to the iPod and/or iPhone which effectively supersedes the significan[ce] of our default search deal.” UPX0671 at -592. Apple was “surprised” by this addition and pushed back on Google’s request, telling Google: “[w]e have no deal on start pages in our products, that cannot be a term in this one.” UPX0671 at -593.
\ 754. Despite initial objection by Apple, Google secured revised language that achieved the same result. In 2007, the parties amended the ISA to include new language stating that Apple would violate its default obligation under the ISA if it set another GSE, such as Yahoo, as the Safari homepage. JX0004 at -648 (§ 5) (Apple ISA (2007 amend.)); UPX0640 at -504 (explaining language in draft ISA amendment and stating, “if Apple places a start page at the beginning of the browser experience and the default search Is not google on such a page, then we will no longer be considered in Default position”); Tr. 4992:4–10 (Braddi (Google)) (Apple abandoned the idea of a Yahoo homepage.).
\ c) Google Did Not Allow Apple To Offer Multiple Versions Of Safari With Different Defaults
\ 755. Also in 2007, Apple considered creating different versions of Safari that would default to different search engines depending on the company from which the user downloaded the browser. UPX0964 at -877. If a user downloaded Safari from Google, the browser would default to Google search; if the user downloaded Safari from Yahoo, it would default to Yahoo search. Id.
\ 756. During the 2007 ISA negotiations, Mr. Pichai raised concerns that Apple’s plans to introduce two versions of the Safari browser—one with Google set as default, and one with Yahoo set as default—was another loophole that would allow Apple to collect revenue share while also giving users a choice of default search engines. UPX0552 at -820 (“In the past [Apple] had mentioned offering two versions of Safari - Google version and Yahoo version.
\ So one concern is they actually position this as two browsers - Safari - Google and Safari - Yahoo in which Google and Yahoo are the default respectively. They really are not making us the default as the user can choose between the two versions but get the rev share per the contract.”). Google was “afraid” that creating two versions of Safari with different default search engines was Apple “cover[ing] their ‘choice’ option which nets no payment from us in a form that looks like default but is really choice.” UPX0670 at -300.
\ 757. During the parties’ ISA negotiations, Google sought to ensure that the renegotiated contract would prevent Apple from introducing different versions of Safari with different default search engines. UPX0670 at -300 (“Pls ensure the language is clear wrt default – ensure there are not 2 versions of the browser (ie an option with Y to get around the default and payment issue.”); Tr. 4988:12–19 (Braddi (Google)) (Braddi’s “concern was covering for Sundar who was concerned that they were trying to do two different browsers with two different selections for default” and addressing “what Sundar wanted protection against.”).
\ Accordingly, the 2007 ISA required Google to be preset as the default search engine in all versions of the Safari browser. JX0004 at -647–48 (§§ 1, 5) (Apple ISA (2007 amend.)) (adding new definitions of “Software” and “Default” to the ISA).
\ d) Google Refused Apple’s Requests To Have “The Option But Not The Obligation” To Set Google As The Default
\ 758. Two years later, Apple again sought flexibility regarding Safari’s default. In 2009, Apple proposed an amendment to the ISA that would provide Apple with “the option but not the obligation” to set Google as the default search engine in Safari. UPX0675 at -250; UPX0615 at -248 (forwarding Apple’s proposal internally); UPX0605 at -269 (“New Apple Ask: The option but not the obligation to set Google as the default search provider.”); Tr. 4995:23–4996:2 (Braddi (Google)) (Apple was seeking “flexibility”).
\ 759. Without a requirement to set Google as default, Apple would have been free to pursue whatever solution it thought was best. Tr. 5000:16–5001:7 (Braddi (Google)). For example, Apple’s proposed contract language would have permitted Apple to set Google as the default search engine only in some locations, only on some devices, or only in some versions of Safari. UPX0675 at -250 (permitting “a non-Google default search service in the web search box of some units of [Safari] but not others (e.g., only in some locations, product lines or versions)”).
\ 760. Google rejected Apple’s request, and the parties maintained Apple’s obligation to use Google as the exclusive default on Safari. Tr. 4998:20–22 (Braddi (Google)) (Apple’s requested contract language “dropped out”); JX0009 (Apple ISA (2009 amend.)) (extending the ISA and leaving Apple’s default obligation unchanged).
\ 761. In 2012, Apple revived its request to have “[n]o obligation to use Google search services or to make Google the default.” UPX0570 at -724. Apple sought this flexibility in its requested terms. Tr. 4998:24–4999:6 (Braddi (Google)). Google again rejected Apple’s request for greater flexibility and insisted that Google get the “benefit of the bargain” if Apple wanted to receive revenue share. Tr. 5001:8–11 (Braddi (Google)). Apple acquiesced. JX0024 (Apple ISA (2014 JCA)) (extending the ISA and leaving Apple’s default obligation unchanged).
\ e) Google’s ISA Restricted Apple’s Ability To Enter Into A Search Partnership With DuckDuckGo For Safari’s Private Browsing Mode
\ 762. Apple considers itself a market leader on privacy. Tr. 2480:3–9 (Cue (Apple)) (Apple “led on privacy across the board” and “thought we could compete” on that basis); Tr. 2484:9–14 (Cue (Apple)) (protecting its users’ privacy is “absolutely” important to Apple, including when they conduct searches); UPX0460 at -170 (“Apple’s privacy policy overlays all search & knowledge alternatives”).
\ Apple prides itself on offering users superior privacy compared to Google. Tr. 2481:1–8, 2482:8–2483:12 (Cue (Apple)) (Apple believes its approach to privacy is better than Google’s); UPX0790 at -677, -681–82 (contrasting Apple’s approach to privacy with Google’s, including with respect to “Search and Ads”); UPX0279 at -338 (“Every time you go anywhere, click on anything, watch anything, listen to anything, buy anything, search for anything, share anything, etc you are providing both data and programming to [Google’s] systems. And we have all read how weak [Google’s] moral compass seems to be.”).
\ 763. Apple understands that its choice of search engines has privacy implications. Tr. 2477:5–7 (Cue (Apple)). The company has “tak[en] heat from privacy advocates for even having Google as the default search engine in Safari.” UPX0094 at -029. And Apple has taken steps to avoid sending certain queries to Google to protect users’ privacy.
\ Tr. 2220:6–8 (Giannandrea (Apple)) (agreeing that one of Apple’s motivations for crawling and indexing the web is to “protect user privacy when possible”); UPX0494 at -544–45 (resolving queries through Apple’s own [redacted] search capability rather than through Google “would be a better privacy angle”).
\ When Microsoft attempted to negotiate for the Safari default, it understood that privacy was “very important” to Apple and that Apple had concerns about Google’s privacy practices. UPX1062 at -607–09.
\ 764. Many popular browsers in the United States offer consumers a private browsing option. Private browsing mode in web browsers, such as Chrome’s Incognito or Safari’s Private Browsing, only prevents the browser itself from tracking users. Tr. 1952:4–1953:18 (Weinberg (DuckDuckGo)). Private browsing mode does not stop online tracking by websites, or search engines. Id.
\ When a consumer conducts a search in private browsing mode on Chrome or Safari, the search engine is still able to collect and store the user’s search data. Id. 1954:6–1955:4; Tr. 3230:11–3232:19 (Tinter (Microsoft)) (“[W]hile [Apple] phones themselves are very private, the default search experience that [Apple has] created on [its] device is very not private.”); UPX0981 at -847 (“We are limited in how strongly we can market Incognito because it’s not truly private, thus requiring really fuzzy, hedging language that is almost more damaging.”).
\ 765. DuckDuckGo is a privacy-focused search engine. Supra ¶¶ 22–23. DuckDuckGo offers users greater privacy by default than other GSEs in the United States. Tr. 1945:1–11 (Weinberg (DuckDuckGo)). For example, DuckDuckGo does not save user IP addresses, user agents, or cookie IDs. UPX0408 at -036 (comparison between DuckDuckGo and Google privacy policies).
\ Accordingly, DuckDuckGo’s privacy-centric search engine could provide an important supplement to private browsers. Tr. 1955:5–1956:19 (Weinberg (DuckDuckGo)) (explaining survey data indicating that private-browsing-mode users would also like to use a private search engine).
\ 766. Apple and DuckDuckGo have discussed ways to work together to improve user privacy, including through privacy-centric search. Tr. 2503:2–2505:2 (Cue (Apple)); UPX0631 at -973 (Apple/DuckDuckGo meeting agenda includes [redacted]).
\ 767. In 2014, DuckDuckGo entered into an agreement with Apple to become a nondefault search option in the Safari browser. Tr. 1972:12–1973:11, 2091:5–16 (Weinberg (DuckDuckGo)); DX0946 at -912 (§ 2) (DuckDuckGo-Apple Service Integration Agreement (2014)). In exchange, DuckDuckGo agreed to pay Apple [redacted]% share of the net advertising revenue generated by searches on DuckDuckGo when the user sets DuckDuckGo as his or her search engine in Safari. DX0946 at -915 (§ 8.1) (DuckDuckGo-Apple Service Integration Agreement (2014)); Tr. 2033:4–2034:3 (Weinberg (DuckDuckGo)) (payment applies when user selects DuckDuckGo).
\ 768. At least as early as 2014, DuckDuckGo began pitching Apple on integrating DuckDuckGo’s search service into Safari’s private browsing mode in some fashion. Tr. 1972:12–1974:5 (Weinberg (DuckDuckGo)). DuckDuckGo proposed implementations in which it would serve as the default search engine in Safari’s private browsing mode. Id. 2095:14–2096:4 (In 2014, DuckDuckGo asked Apple to “consider making a carve out for private browsing mode where [DuckDuckGo] could be the default.”).
\ However, because DuckDuckGo was aware of restrictions on Apple under its contract with Google, DuckDuckGo also proposed alternative implementations. UPX0620 at -364 (2014 DuckDuckGo proposal stating, “[w]e have spoken about Private Browsing previously and are bringing it up again because of the Apple-Google deal coming up for renewal. We’re wondering if you would consider including an option to allow the user to switch search engines when entering Private Browsing. If a user were presented with an option to switch to DuckDuckGo for a Private Browsing session, then it would not interfere with the search default.”).
\ 769. Executives at Apple expressed interest. Upon hearing news of a change to Google’s privacy policy in 2016, Rhonda Stratton (Apple’s partner manager for DuckDuckGo) lamented, “[w]hat ever happened to do no evil? Met with DuckDuckGo yesterday, they suggested we offer their search engine as part of private browsing and do not track me settings in safari – I think we should do it." UPX1086 at -553; Tr. 1973:12–23 (Weinberg (DuckDuckGo)) (Ms. Stratton was Apple's "partner[] manager" for DuckDuckGo); Des. Tr. 82:7-83:6, 83:9-12 (Apple-EC 30(b)(6) Dep.) (At Apple, Ms. Stratton was the “main person” evaluating GSEs as default options in Safari's drop down menu).
\ In June 2017, Craig Federighi, Apple's Sr. VP and head of engineering, forwarded a pitch from DuckDuckGo "to be the default search engine in Private Browsing,” calling it an “[i]nteresting idea.” UPX0676 at -571.
\ 770. In October 2017, DuckDuckGo met with Apple executives, including Ms. Stratton, Mr. Federighi, and Mr. Croll, at Apple's headquarters. Tr. 1974:24–1975:16 (Weinberg (DuckDuckGo)). At this meeting, DuckDuckGo presented its research about users’ privacy preferences when using Safari's private browsing mode. Id. 1975:17-18, 1976:1– 1977:11. DuckDuckGo believed the meeting "went very well,” and the teams planned to discuss ways they might collaborate on private browsing. Id. 1977:13-1978:20.
\ 771. In July 2018, DuckDuckGo met with Apple again and presented options for how Apple could implement DuckDuckGo into Safari's private browsing mode. Tr. 1978:8-1980:15 (Weinberg (DuckDuckGo)). These options included (1) setting DuckDuckGo as the default search service for Safari's private browsing mode, (2) providing users with a "toggle" to turn on “private search" with DuckDuckGo when they used private browsing mode, and (3) displaying a message that includes a link to activate "private search" with DuckDuckGo when users turned on private browsing mode. Id. 1978:21-1980:15 (discussing alternatives); UPX0818 at .006-09 (depicting possible implementations).
\ DuckDuckGo presented options (2) and (3), which did not involve setting DuckDuckGo as the default, because DuckDuckGo believed that Apple “wouldn't
do a default in private browsing mode because of their Google contract,” and DuckDuckGo was "trying to get something that would work." Id. 1985:5-14.
\ 772. After another meeting in September 2018, DuckDuckGo believed that Apple was considering integrating DuckDuckGo into Safari's private browsing mode in some manner in 2019. Id. 1987:15–1988:6 (“We were very excited about this meeting" because Google was "trying to put it in on the roadmap" for 2019 but “hadn't figured out the design yet"); id. 1987:15-1988:19, 1989:9–12 (Apple “had identified pretty clearly that the people in the room could not resolve this issue around their Google contract and that the next step was they were going to go figure that out."); id. 2031:3-16 (discussing UPX0666 and stating that "the primary obstacle in this… was related to Apple's contract with Google about search integrations"); UPX0666 at -735 (“They are considering this for the 2019 release.”).
\ DuckDuckGo understood that the "[n]ext steps” were for "Apple to discuss internally on their Google contract, and discuss internally about the various implications of moving away from Google.” Id. at -735; id. at -734 ("They also expressed interest in exploring integrating Private Browsing and need to figure out the Google implications, and haven[']t fully thought through this.").
\ 773. In early 2019, Apple proposed new contract language to DuckDuckGo regarding the revenue share rate that would apply if DuckDuckGo “bec[ame] the default search engine in any Apple Product or in any feature of an Apple Product." UPX1012 at -949. DuckDuckGo interpreted this proposal to mean that Apple was considering DuckDuckGo for the preset default search engine in Safari's private browsing mode. Tr. 2033:4-2035:25, 2037:7-2038:4 (Weinberg (DuckDuckGo)) (“[O]ur understanding was the only place they would be making us the default would be in private browsing mode.").
\ The companies also discussed the revenue share rate that would apply under non-default implementations. UPX1112 at -764 (“Since we're not fully clear on what the Private Browsing Integration would look like, we wanted to clarify how rev share would be applied if we were to integrate in a ‘list/ballot box’ option vs a default in private mode.”).
\ 774. Internally, Apple executives continued to consider how various implementations of DuckDuckGo would impact Apple’s distribution contract with Google and Apple’s relationship with Google more broadly. In February 2019, Apple discussed whether to move forward with an implementation in which “[u]sers who turn on private browsing for the first time will receive a DuckDuckGo recommendation,” and “[t]he search engine setting can then be different” for standard browsing mode and private browsing mode. UPX0991 at -335.
\ Apple understood, however, that even this non-default implementation would potentially disrupt the Google relationship. Id. at -333–34 (“Before taking our next step, Craig and I would like your take on the effects these [changes] might have on the discussions with Google”; “the implication of recommending DuckDuckGo when customers choose private browsing is that Google does not respect your privacy, which while true would certainly be a public slap in the face.”); id. at -333 (discussing the “contractual implications” of this implementation).
\ 775. After a phone call with Apple in March 2019, DuckDuckGo believed that, while there was still “concern around their Google contract,” Apple may have found a “design [that] would be okay with all parties involved.” Tr. 2038:5–2039:22 (Weinberg (DuckDuckGo)). Although DuckDuckGo “never saw the exact design,” it understood that Apple would present users with a list of search services that met certain privacy-related criteria and allow users to select the default for private browsing mode from that list. Tr. 2038:5–2040:14 (Weinberg (DuckDuckGo)); UPX0667 at -504–05.
\ 776. Between October 2017 and March 2019, DuckDuckGo and Apple met approximately 20 times to discuss private browsing integrations. Tr. 2043:17–22 (Weinberg (DuckDuckGo)); id. 1973:12–1974:23. DuckDuckGo invested substantial company resources into its engagement with Apple because becoming the default search engine in Safari’s private browsing mode, or even being recommended by Apple in an opt-in prompt to users, would have afforded DuckDuckGo “scale” that would allow it to conduct additional experimentation to improve its quality and relevancy. Id. 2046:24–2048:8, 2050:4–2051:7.
\ DuckDuckGo would have obtained substantially more queries if it could be the default search engine in Safari’s private browsing mode. Id. 2047:13–20 (estimating an increase of “probably multiple times” DuckDuckGo’s market share at the time).
\ 777. In June 2019, DuckDuckGo expected Apple to announce some form of private search integration in Safari’s private browsing mode. Id. 2044:4–9, 2044:20–2045:24. Apple did not make any product announcement of this kind and instead shut down discussions with DuckDuckGo about private browsing. Id. 2045:25–2046:21 (“[M]y takeaway . . . was that it was dead.”).
\ 778. Four years later, in September of 2023, Apple recognized that users may desire a different default search engine for private browsing. The release of iOS 17 allowed users to select a default search engine for Safari’s private browsing mode that is different from their default search engine for Safari’s standard browsing mode. Tr. 2173:6–20, 2174:11–2175:23 (Giannandrea (Apple)) (referring to UPXD005); Tr. 9917:15–9918:24 (Murphy (Def. Expert)) (indicating that he was unaware Apple had introduced this capability). Pursuant to the ISA, both Safari search defaults are pre-set to Google. Tr. 2173:6–24, 2174:20–2175:3, 2203:20–2204:3 (Giannandrea (Apple)).
\ Apple is not prompting users to change this new default setting and is not providing a recommendation that users select DuckDuckGo. Tr. 2174:11–2175:23 (Giannandrea (Apple)) (the switching process for the private browsing mode search default is the same as for the standard browsing mode search default).
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This content originally appeared on HackerNoon and was authored by Legal PDF: Tech Court Cases
Legal PDF: Tech Court Cases | Sciencx (2024-08-12T21:32:41+00:00) Google’s Apple Contract Is Exclusive: Google Did Not Allow Apple To Set An Alternative GSE. Retrieved from https://www.scien.cx/2024/08/12/googles-apple-contract-is-exclusive-google-did-not-allow-apple-to-set-an-alternative-gse/
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