“It’s indisputable that Google has built a monopoly in search – devised by gobbling up every major distribution channel and colluding with Apple through sweetheart deals and revenue kickbacks,” said Sacha Haworth, Executive Director of the Tech Oversight Project. “This latest revelation shows the necessity of having enforcers dedicated to holding monopolists accountable and protecting competition. We should not accept that the online marketplace is run by a handful of powerful companies who impose their will through higher prices, less choice, and monopoly power. They broke the law and deserve to pay the price
ICYMI: Google’s Payments to Apple Reached $20 Billion in 2022, Antitrust Court Documents Show
By Leah Nylen on 5/2/24
Alphabet Inc. paid Apple Inc. $20 billion in 2022 for Google to be the default search engine in the Safari browser, according to newly unsealed court documents in the Justice Department’s antitrust lawsuit against Google.
The deal between the two tech giants is at the heart of the landmark case, in which antitrust enforcers allege Google has illegally monopolized the market for online search and related advertising. The Justice Department and Google will offer closing arguments in the case Thursday and Friday, with a decision expected later this year.
Google and Apple had hoped to shield the payment amount from public disclosure. At the trial last fall, Apple executives testified that Google paid “billions,” without specifying a number. A Google witness later accidentally disclosed that Google pays 36% of the revenue it earns from search ads to Apple.
Court documents filed late Tuesday ahead of the closing arguments mark the first public confirmation of the figures by Apple’s senior vice president of services, Eddy Cue. Such numbers aren’t disclosed by either company in their securities filings. The documents also revealed the importance of the payments to Apple’s bottom line. For instance, in 2020, Google’s payments to Apple constituted 17.5% of the iPhone maker’s operating income.
The agreement with Apple is the most important of Google’s default deals, since it sets the search engine for the most used smartphone in the US.
Apple first agreed to use Google in the Safari browser in 2002 for free. But the companies later decided to share revenue made from search advertising. By May 2021, that translated to Google paying Apple more than $1 billion a month for its default status, prosecutors said in the filing.
Microsoft Corp., which operates competing search engine Bing, has repeatedly tried to entice Apple away from its relationship with Google. The company offered to share 90% of its advertising revenue with Apple to make Bing the default in Safari, according to the court documents. Those figures also weren’t previously disclosed.
Microsoft Chief Executive Officer Satya Nadella testified at the trial last year that the company was willing to make a number of concessions, including hiding the Bing brand, to persuade Apple to make the switch, which he said would be “game changing.”
“Whomever they choose, they king-make,” Nadella said of Apple.