Apple, the Biggest and Perhaps Most Underpaid Affiliate Yet

Google and Apple’s relationship — and resulting payout — sounds mighty familiar.

Written by Brook Schaaf

Last week, the podcast Marketecture speculated on possible outcomes for Google’s monopoly violation of Section 2 of the Sherman Act. Their conjecture was that the judge would not attempt to break the company up or end distribution deals but rather simply forbid exclusivity, which might be the mildest remedy. 

This approach should be an entry for affiliate relationships. Indeed, Apple could be considered to have been an affiliate for Google because it has received a revenue share of about 36% for defaulting Safari’s search engine to Google, about $20 billion in 2022 with another $6 billion going to other companies, including Mozilla and Samsung. 

There’s an unmentioned “would-have bought-anyway” aspect to this relationship reminiscent of criticisms against affiliate publishers — i.e., if Apple had given users a choice, most would have picked Google anyway, so it’s paying for what it would have gotten … for free. But this would have left an entry point for competitors, hence the payout, hence the exclusivity, hence the monopoly ruling.

On the other hand … the podcast mentioned that Google essentially blends traffic to “sell a package of clicks to advertisers … if you have your owned and operated sites and … third party sites and you’ve got to share revenue … [which traffic] are you going to price up?” In other words, Google would, of course, be incentivized to assign the high value to the revenue pool that is not shared, which means an outsized portion of the value Google harvests may actually be coming from Apple, which might in some sense actually be getting shortchanged. 

I’m not saying people are going to start referring to this as an affiliate deal, but for better or worse, fair or unfair, it sure does have the characteristics of one, as will any future mandated non-exclusive relationships. (Keep in mind Apple can build its own search engine much more easily than it can build its own click advertiser network.)

Whatever name it goes by, this high-profile partnership underscores the importance of fair financial remuneration, regardless of scale. It also highlights the need for transparency in how traffic is valued and revenue is shared. Of course, in order to take advantage of this, affiliate needs to be at the table, though I fear our entire channel will be overlooked. Somebody should tell the judge that giving affiliate links an entry point would probably be the very best way to thwart a monopoly and support the next generation of businesses, large and small.