On the identical day that the US Federal Trade Commission sued Amazon for utilizing anticompetitive and unfair methods to take care of monopoly energy within the on-line retail sector, Eddy Cue, Apple’s senior vp of companies, spent hours a number of blocks away on the E. Barrett Prettyman US District Court House as a reluctant prosecution witness within the antitrust trial of Google.The US Justice Department (DOJ) has accused Google of monopolizing the search engine market by way of unique offers to change into the default search engine for system producers and software program corporations. The feds say that Google’s practically 90% share of the search engine market palms it an unfair aggressive benefit that makes it unimaginable for rivals to compete.Roughly half of Cue’s practically 4 hours on the witness stand Tuesday, like a lot of the testimony within the three weeks of the trial up to now, was hidden in a sealed courtroom, closed to the press and residents. The remainder of Cue’s time on the stand happened in an open session, throughout which the DOJ questioned him on the revenue-sharing settlement between Apple and Google, Apple’s determination to depend on Google for its default search engine, and the extent to which Apple could be ignoring Google’s extra undesirable traits.Drill-down on Apple’s income shareMegan Bellshaw, assistant chief of the DOJ’s antitrust division, questioned Cue on Apple’s info service settlement (ISA) with Google, first solid in 2002 and subsequently prolonged a number of occasions. Although Cue was not concerned within the earlier variations, he was the lead negotiator for a revised ISA agreed to in 2016.One of Cue’s targets through the negotiations with Sundar Pichai, CEO of Alphabet, which owns Google, was to extend income. Under an settlement hammered out throughout a sealed court docket session on the day’s begin, a “Rosetta Stone” was developed, a rubric that allowed Cue to make use of letters corresponding with numbers when answering questions by Bellshaw concerning the revenue-sharing association.”One of the goals was to increase revenue share back to where it was in the beginning,” Cue stated. Cue stated Pichai could not conform to Apple’s requested “c” share of income and felt that it ought to keep on the “a” stage. “I told him that he and I need to sit down alone next week,” Cue stated. “If we can’t agree on a revenue share agreement, we should not move forward. Google ended up agreeing to pay “b” as a percentage of revenue, maintaining Google as “the default search engine on all Apple gadgets the place we’ve a search engine,” according to Cue.Bellshaw continued questioning Cue on how much money Apple generates from its deal with Google, prompting Cue to say, “The deal has much more to it than simply economics. I feel it was pretty clear on the time that there was no person on the market when it comes to search engines like google that was higher than Google.” The complexity of search engine choiceBellshaw presented Cue with the easy set-up options Apple offers to new iPhone users, including one-click selections of privacy and do-not-track choices. Regarding these simple options, Cue said, “The extra choices you get are likely to frustrate prospects.”But these convenient choices don’t apply to Apple’s choice of Google for the default search functionality for the Safari browser, Cue said. For one thing, the ISA with Google doesn’t permit Apple users to choose a default search option.Moreover, search engine choice is more complex. “Sharing location, being tracked, everybody understands,” Cue said. But a lot more goes into selecting a search engine, which most consumers don’t understand. “We wished the potential to offer the perfect companies for our prospects, and Google does that greatest,” he said. Later, Cue noted that customers are free to install any separate search engine app they choose, just not the default search engine used by Apple’s Safari.Apple does, however, allow customers to opt out of the default search engine in some countries, such as China or North Korea, where the governments have banned Google search, Cue confirmed. Challenging Apple’s rosy view of GoogleBellshaw pressed Cue on evidence that undercut Cue’s upbeat assessment of Google’s search engine qualities. She pointed to an August 2012 FTC civil penalty of $22.5 million that Google paid for misrepresenting to Apple Safari users that it would not place tracking “cookies” or serve targeted ads to those users, a misstep that violated an earlier FTC privacy deal.She also pointed to former Google CEO Eric Schmidt, who once said, “The Google coverage on numerous issues is to get proper as much as the creepy line and never cross it.” Cue’s response to these examples of Google’s less-than-desirable aspects was to point out that in providing users with a Google default engine, Apple steers clear of some of Google’s problems by eliminating the need for users to log in. “When we did the cope with Google, from the very starting, we did not enable Google to make prospects log in.”Bellshaw asked Cue if Apple has a contractual obligation to defend the ISA in situations involving government action. Cue said that Apple’s lawyers know more about this contract provision than he does, but he thought the language was put in the contract by both counsels related to an EU investigation of Google.A high-stakes antitrust trial effectively held in secret It’s difficult to place any of Cue’s testimony in context because about half of it occurred during a sealed court, during which connections between the DOJ’s allegations and Cue’s answers might have arguably been made clear. The opaque nature of the trial, which began on September 12 and will last until mid-November, is a result of efforts by both Google and Apple, which combined are worth around $5 trillion, to maintain secrecy around the court’s proceedings to protect competitively sensitive information. Google successfully opposed a petition by a group of public interest advocates to make available a publicly accessible audio feed of the unsealed portions of the trial. Google also successfully challenged the DOJ’s online posting of the company’s emails, charts, and internal presentations used as evidence in the trial, forcing the federal prosecutors to remove them. (On September 26, Judge Mehta resolved the dispute, ruling that documents used during the trial can be published online at the end of each day.) On September 25, on the eve of Cue’s testimony, the Justice Department objected to a request by Apple to seal exhibits it planned to use in questioning Cue.The sealed proceedings have obscured so much of the trial that Matt Stoller, Director of Research at the American Economic Liberties Project, calculates that by September 24, half of the week’s courtroom days were sealed. A New York Times analysis revealed that two-thirds of thirty-five motions and responses filed by Google before opening statements began on September 12 were sealed.As Stoller points out, the tech giants’ demands for secrecy are finding a receptive audience with Judge Mehta. During a pretrial hearing, Mehta said, “Look, I’m a trial decide. I’m not anybody that understands the trade and the markets in the way in which that you just do. And so, I take critically when corporations are telling me that if this will get disclosed, it should trigger aggressive hurt.”‘Atrocious, highly unusual’ secrecy fuels feelings of big tech captureMegan Gray, former General Counsel and Vice President of Public Policy at search engine DuckDuckGo and a key player in the FTC case that cost Google $22.5 million for false privacy claims, tells Computerworld that the unparalleled degree of secrecy surrounding the case is “atrocious, extremely uncommon, and I feel finally counterproductive. All it should do is generate extra conspiracy theories and emotions of seize by massive tech.” (DuckDuckGo’s CEO Gabriel Weinberg testified on the stand last week for nearly five hours, with only one hour of his testimony open to the public. Late on September 26, Mehta authorized the release of the under-seal portion of Weinberg’s testimony.)Gray also echoes the concern that Mehta has been too accommodating to the big tech players. “The decide has deferred to the businesses on easy methods to interpret the regulation on what justifies closure of a court docket trial,” she says.Moreover, she takes a dim view of what she perceives as the DOJ’s weak objections to all the secrecy. “They have made a calculation that they do not need to ruffle this court docket’s feathers,” she says. “They additionally want the cooperation of numerous third-party witnesses, all of whom, like Apple, need all the things stored below wraps. So, they made a calculated determination that we’ll simply give attention to legal responsibility and the decision, not the opposite equally necessary targets of a trial.”She further underscores the difficulty of making sense of what’s being argued during the trial, given that only shards of information are poking through the veil of secrecy. “I’m sympathetic to numerous positions, however I actually have a tough time attempting to know what the aggressive hurt right here is,” she says.
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