Except that in this case Apple is a distributor. This is a pretty normal distribution agreement. Apple isn't in the search engine business, so to say they are b

Except that in this case Apple is a distributor. This is a pretty normal distribution agreement. Apple isn't in the search engine business, so to say they are being paid to not compete is like saying Best Buy is being paid not to compete (ie, they don't produce computers) by Lenovo. Many distribution agreements have a clause saying the distributor can't create their own product and compete. The reason is, as a distributor, you get a lot of insight into the customers, the product, the pricing. It's completely reasonable when you consider the full value chain of a product. Further, if Apple did compete in the search engine business, many would claim they would be unfairly competing by using their dominant market position in smart phones to dominate another industry. Competition issues are complex.