Kevin Murphy, who is the Google professor-manager who revealed the deals with Apple
A twist in the trial against Google for anti-competitive practices. His witness, Kevin Murphy, revealed that the company shells out 36% of its advertising revenue to Apple to secure the privilege of being the default search engine. All the details
There must be a reason if we all, or almost all, use Google as a search engine. As the Mountain View giant states, it will partly be because "it is simply a superior product". But not only. It is also the default search engine on many technology products, such as smartphones, tablets, iPhone, iPad, and so on. Of course, you can always decide to move on to another, but who has ever really done that?
All this pushed the United States Department of Justice, first under the presidency of the Republican Donald Trump and then with the Democrat Joe Biden, to launch a lawsuit against Google for violating antitrust rules. The prosecution alleged that the giant led by Sundar Pichai had guaranteed itself a monopoly in online search also through illegal payments to companies such as Apple and Samsung. Accusation confirmed yesterday by a witness who should have supported Google's reasons and who instead may have given an extraordinary assistance to the United States government.
Kevin Murphy, professor of economics at the Booth School of Business at the University of Chicago, has in fact let slip (?) that Google has entered into an agreement with Apple, to which it pays 36% – or over a third – of its relative revenue to advertising revenues, which allows it to be the default search engine.
WHO IS KEVIN MURPHY
Born in Ireland but raised in England, Kevin Murphy earned his BA ( bachelor's degree ) from the University of Cambridge, his MEng ( Master of Engineering ) from the University of Pennsylvania and his doctorate from the University of Berkeley. He later did a postdoc at MIT and from 2004 to 2012 was an associate professor of computer science and statistics at the University of British Columbia in Vancouver, Canada.
After getting tenure, he took a sabbatical to fly to California from Google and never looked back. In fact, he resigned from university and joined the company full time as a scientific researcher.
Currently, his CV states , he manages a team of 12 researchers within Google Deepmind working on generative models, Bayesian inference and other topics. He has published over 134 articles and 3 books on machine learning published by MIT Press.
TESTIMONY AT THE TRIAL AGAINST GOOGLE
With such a CV, not even the Google lawyer who called him to testify at the trial could hide his shock when Murphy revealed that Google pays Apple 36% of the revenue deriving from search advertising carried out through the Safari browser. But in addition to being a bombshell, the revelation came in the last week of the hearing, when everything seemed to have already been said (i.e. nothing similar that could nail Google like this).
As if on purpose, last week, Bloomberg reports, the company filed a document in court in which it argued that revealing further information about the agreement "would unreasonably compromise Google's competitive position vis-à-vis both competitors and of the other counterparties". Today that agreement – made in 2002 – is the most important of Google's default agreements, since it sets the search engine for the iPhone, the most used smartphone in the United States.
According to what Apple's Eddy Cue declared in September, the company he works for would actually have wanted a larger share of the money that Google earns from Safari traffic, but the parties then agreed on the figure revealed by Murphy, who also reported that payments to device makers and others were often passed on to users in the form of a cheaper phone or a better data plan.
HOW MUCH MONEY DID GOOGLE GIVE TO APPLE (AND NOT ONLY)
According to The Verge , Google didn't just pay Apple, however. To secure the privilege of being the default search engine for browsers like Safari and Firefox, it spent $26.3 billion in 2021 alone, $18 billion of which went to the iPhone maker.
WILL THIS BE THE END OF GOOGLE?
Such a twist provides the US Department of Justice with evidence that Google is illegally maintaining its dominance of the search engine and search advertising markets, effectively preventing any competition. Satya Nadella himself, CEO of Microsoft, recently testified at the trial stating that there is no competition with Google.
However, it remains difficult to predict the outcome of the trial because although it is undeniable that Google dominates online searches, the prosecution must demonstrate that it manages to do so because it uses anti-competitive practices and not because "it is simply superior", as they claim in Mountain View. Furthermore, Google will always be able to respond that users have the possibility to change search engines if they want. The sentence, therefore, is not around the corner but who knows if Google will forever remain what we know.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/kevin-murphy-chi-e-il-prof-manager-di-google-che-ha-svelato-gli-affarucci-con-apple/ on Wed, 15 Nov 2023 14:01:34 +0000.