Apple subpoenaed in Google probe
THE US Federal Trade Commission (FTC) had subpoenaed Apple as part of its antitrust probe of Google, seeking information on how the computer maker incorporated the search engine on the iphone and ipad, officials said yesterday.
The agency’s request for documents included the agreements that made Google the preferred search engine on Apple’s mobile devices, said the officials, who were not authorised to speak publicly and declined to be identified.
Google rivals such as Microsoft have criticised these agreements as anticompetitive.
The subpoena indicates the FTC is intensifying its scrutiny of Google’s business practices. Details of the Apple-google relationship may show whether Google was abusing its dominance of internet search to boost revenue in the cellphone advertising market, said Allen Grunes, an antitrust lawyer in Washington.
“As mobile search gets more widespread, the default setting becomes more significant,” said Grunes, who did not represent Google or its rivals.
The FTC had sent subpoenas to other handset makers and wireless carriers, said one of the officials, who declined to name the companies.
In its broader antitrust investigation of Mountain View, California-based Google that began about a year ago, officials said in January that the FTC was examining whether the company unfairly increased advertising rates for competitors and ranked search results to favour its own businesses, such as its social networking site Google+.
Google has been the default search engine for the iphone since Apple introduced the device in 2007 and on the ipad since its 2010 debut, as well as for the ipod Touch. Apple also uses Google Maps as a favoured service on the iphone and ipad.
The FTC’S probe of Google was also looking at whether the company was using its control of the Android mobile operating system to harm competition, officials familiar with the probe said last year. Apple and Google have been vying for leadership in the smartphone market since the first Androidbased handset came out in 2008.
“It’s very likely in the next few years, we’ll see mobile search outstripping desktop search,” said Ben Schachter, a New York-based analyst with Macquarie Capital, who has a buy rating on Google stock.
Google’s Android became the dominant cellphone operating system last year and led the market with a 50.9 percent share in the fourth quarter of 2011, compared with the iphone’s IOS mobile operating system’s 23.8 percent share, according to a February report by research firm Gartner.
Kristin Huguet, a spokeswoman for Apple, Cecelia Prewett of the FTC, and Adam Kovacevich, a Google spokesman, declined to comment on the subpoenas.
Google earned $1.3 billion (R9.8bn) last year in searchrelated revenue on Apple products, according to a report from Macquarie Capital. Google paid Apple $1bn to be the default search engine. Google’s share of US mobile-ad revenue was 52 percent in 2011, driven by searches, emarketer estimated. – Bloomberg