Tech giant Apple (NASDAQ: AAPL) is ramping up efforts to built its own rival search engine technology for iPhones as U.S. antitrust authorities target its relationship with Google (NASDAQ: GOOGL, GOOG), the Financial Times reported Wednesday.
Google pays between $8-12 billion a year to the Cupertino, Calif.-based company to ensure that its search engine is installed as iPhone’s default search tool. But in iOS 14, the latest version of the iPhone operating system, Apple is reportedly showing with little fanfare its own search capabilities and links directly, rather than through another engine, to websites when users type queries from their home screen.
The changes went largely unnoticed until August, says the report, claiming they add to “growing evidence” — including Apple’s hiring of John Giannandrea, Google’s former head of search, and the company’s frequent job ads for search engineers — that the iPhone maker is developing a rival to Google search.
The report also points to increased activity from Apple’s web crawler named Applebot. Suganthan Mohanadasan, a digital market consultant, told FT that Applebot has shown up “a ridiculous number of times on his clients’ websites to catalogue their online material. “When the crawl rate increases, that tells us they are trying to gather more information,” said Mohanadasan.
Citing several other people in the industry, the FT notes that while the iPhone’s default search engine remains Google, the change is “an important advance” that “could form the foundation of a fuller attack” on the search giant.
FT further reiterates that Apple has a “growing incentive” not to continue with Google as iPhone’s default search engine because of antitrust scrutiny, noting the U.S. Department of Justice (DoJ) holds Google’s annual payments as crucial to its antitrust case against the company.
The development will most likely cast a shadow on the multibillion-dollar payments that Google makes to Cupertino. It could even end it. In fact, the DoJ launched last week an antitrust case against the search giant claiming the arrangement represents illegal tactics used by both companies to protect Google’s monopoly and stifle competition.
Apple shares were trading down by $3.69, or 3.17%, at $112.91 at the time of publication Wednesday. Shares are up 86% year-over-year and 54% year-to-date. Meanwhile, Google shares traded 70 points, or 4.40%, lower at $1,533.75.