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Apple's SVP of Services testified that making Google the default search engine on iPhones made the most sense without a valid alternative

1 x cover Eddie Cue part II(Click on image to Enlarge)

Early this morning we reported that Apple's SVP of Services would be testifying in federal court regarding their licensing agreement with Google for online search.

Later in the morning, Eddy Cue, Apple’s senior vice president of services, testified that the company chose to make Google the default search engine on iPhones because it made the most sense for consumers and “there wasn’t a valid alternative.”

Cue, Apple’s lead negotiator of its multibillion-dollar contract with Google, appeared in federal court in Washington, D.C., to discuss the long-standing agreement between the two companies. Though more granular details of the agreement are likely to come up further in testimony that’s closed to the public, Cue’s opening statements shed light on aspects of the deal rarely discussed in the open.

“When we’re picking search engines, we pick the best one and we let the customer easily change them,” Cue said. He later added that when it comes to alternatives Apple offers, they have some that “customers have never heard of,” which can make them afraid of making the wrong choice.

When Cue renegotiated the Information Services Agreement with Google CEO Sundar Pichai in 2016, one of his goals was to get Google to increase the revenue share percentage it pays to Apple, Cue said in his testimony. Under the terms, Google pays an undisclosed cut of the net revenue it makes from advertising on searches run on Apple devices.

The DOJ also asked Cue to detail how Apple decides where and how it will give consumers a choice about the setup of their iPhones. One alternative Google competitors have floated to its default status on devices is to give consumers a chance to review their search engine options in a way that presents them equally.

Cue’s testimony spoke to some of the challenges that approach could face.

He said that when consumers get a new device, they want it to work quickly.

“The more choices or the more options that you get, it frustrates customers,” he said. So when a customer gets a new iPhone, for example, they’ll only be asked about choosing key details they want to deal with right away, such as font size.

Cue said offering users a choice for their appearance settings out of the box is different from selecting a search engine.

In certain countries, such as China and Russia, Apple has carved out the default status for Google because it determined that there was a better option for consumers in those regions. But in other places around the world, the company still sees Google as offering the best experience, Cue said.

In his testimony, Cue also reiterated criticism that Apple has when it comes to Google’s privacy practices. Cue said he agrees protecting privacy is important to Apple, including on search, and said the company has taken steps to limit Google’s tracking ability on its devices. For example, it prevents Google from forcing users to log in to use the search engine.

During cross examination, Cue testified that having search integrated into its browsing product out of the box makes Apple’s offerings more competitive. He referenced Apple founder Steve Jobs’ original pitch of the iPhone as an iPod, phone and internet in your pocket, saying that’s what consumers expect. For more, read the full CNBC report.

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