Apple Denies Microsoft Bing Deal Due to Concerns

Apple Denies Microsoft Bing Deal Due to Concerns

Microsoft argues that Google, which pays Apple up to $19 billion each year to be the default search engine on its devices, stopped the sale.

Microsoft reportedly planned to sell Bing to Apple in 2018 but failed.

According to a document in Google’s antitrust dispute with the US Justice Department, the deal fell through because Apple was concerned about Bing’s search quality, advertising unit, and monetization capabilities.

According to CNN, Google claims that the failed sale demonstrates that Bing lost out because it is an inferior search engine, not because Google has unfairly dominated the search industry.

Apple turns down Microsoft. Microsoft reportedly offered to sell Bing to Apple or form a Bing joint venture together. In the document, Eddy Cue, Apple’s senior vice president of services, revealed why the company turned down Microsoft.

  • “The quality of Microsoft’s search, as well as their investment in search, were insignificant. So everything was lower. So the search quality was worse.”
  • “They were not investing at a level equal to Google or Microsoft’s. Their advertising organization and monetization were also subpar.”

What Google is saying. Google believes that Microsoft’s unsuccessful effort to sell Bing to Apple shows that the search engine is inferior. Google stated in its filing:

  • “In each case, Apple weighed the relative merits of Bing and Google and determined that Google was the better default option for Safari users. That is competition.”

Google also claims that Microsoft approached Apple many times, in 2009, 2013, 2015, 2016, 2018, and 2020, seeking to make Bing the default search engine in Apple’s Safari web browser. However, Apple has continuously rejected the concept, citing worries about Bing’s performance.

What Microsoft has said. Microsoft presents that its attempts to sell Bing to Apple were hampered by quality difficulties; instead, the computer behemoth believes the deal was blocked by Google. Microsoft’s CEO of Advertising and Web Services, Mikhail Parakhin, stated that he offered Apple more than 100% of the income or gross profit to make Bing its default search engine, but the proposal was rejected due to Apple’s agreement with Google.

Speaking at the federal antitrust trial, Parakhin said that this was despite Microsoft proposing to pay Apple more than Google, which he claims offered around 60%. He stated:

  • “We were just big enough to play but probably not big enough to win if that makes sense.”

What the DOJ says. Google has a commercial arrangement with Apple to be the default search engine on its gadgets for about $10 billion per year. Furthermore, Google pays Apple advertising income, which is one of the search engine’s highest charges. In its lawsuit, the Justice Department said that Apple CEO Cue testified:

  • “If Apple did not get the large sums it wanted from Google, Apple would have created its search engine,” the Justice Department claimed in its lawsuit.”

Bernstein analyst Toni Sacconaghi estimates that Google might pay Apple up to $19 billion this fiscal year. The DOJ says that these large quantities of money are why Apple rejected a prospective joint venture with Microsoft, not that Bing is inferior to Google.

Why should we care? The US Justice Department is accusing Google, claiming that it uses unfair techniques to preserve its position as the world’s leading search engine. If Google can establish the power of its search engine, it may win the case. However, if it loses, Google may lose its automatic default search engine position on popular Apple devices, posing a challenge to its search market domination.

Market share figures. According to the United States Department of Justice, Google controls 90% of the search industry. According to StatCounter, Bing has a 3% global market share.

Leave a Reply

Your email address will not be published. Required fields are marked *