As part of a deal to be the default search engine on Apple devices, Google pays the tech giant 36% of the revenue earned via search ad activity on Apple’s Safari browser.
It’s extremely rare for information of this nature to be made public. In this case, it was released during Google’s defense at the Justice Department’s antitrust trial in Washington, D.C.
The disclosure was made on Monday by Kevin Murphy, a University of Chicago professor who is also an economics expert for Google owner Alphabet.
In what was clearly an awkward moment, John Schmidtlein, Google’s main litigator, “visibly cringed when Murphy said the number, which was supposed to remain confidential,” Bloomberg reported.
Just a few weeks ago, a New York Times report put a figure on this, claiming that Google paid “around $18 billion” to Apple in 2021.
A deal between the two companies to make Google the default search engine on iPhone, iPad, and Mac has been in place since 2002. That was five years before the launch of the iPhone, after which the importance of the agreement — for both sides — only grew. While it’s been rewritten a number of times over the years, the huge numbers show just how important it is to Google to retain its prime position on the world’s most popular smartphone.
In the current antitrust case, the Justice Department is claiming that Google has a search monopoly and is illegally maintaining its power over the search engine and search ad markets.
Testifying in the trial last month, Apple’s senior vice president of services, Eddy Cue, said that Google is the iPhone’s default search engine simply because it’s the best one available.
When Microsoft CEO Satya Nadella took the stand, he claimed that the deal between Google and Apple means it’s virtually impossible for search engines like Microsoft’s Bing to have any chance of grabbing a meaningful share of the search market.
It’s clear that for Google and Apple, the deal has been working just fine, allowing both parties to rake in huge amounts of revenue. That’s why this antitrust case is so important. If Google loses, its cozy deal with Apple could be ordered to end, with iPhone users then offered a choice of search engines when setting up their device, removing Google’s engine as the default.
It could also prompt Apple to develop its own search engine, though the launch of any such product could be years away.
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