In newly unsealed court documents related to the Justice Department’s antitrust lawsuit against Google, it was revealed that Alphabet Inc. paid Apple Inc. a whopping $20 billion in 2022 for Google to remain the default search engine in the Safari browser. This deal between the two tech giants is at the center of the landmark case, where antitrust enforcers argue that Google has unlawfully monopolized the online search and advertising market.
The closing arguments in the case are set to take place on Thursday and Friday, with a decision expected later this year. Google and Apple had hoped to keep the payment amount confidential, but court documents now confirm that Google pays 36% of its search ad revenue to Apple. Apple’s senior vice president of services, Eddy Cue, confirmed these figures, which are not disclosed in either company’s securities filings.
The agreement with Apple is crucial for Google as it sets the search engine for the most used smartphone in the US. Google has been paying Apple since 2002, with payments surpassing $1 billion a month as of May 2021. Microsoft Corp., Google’s competitor, has tried to entice Apple away by offering to share 90% of advertising revenue to make Bing the default search engine in Safari.
Microsoft’s CEO, Satya Nadella, testified that Microsoft was willing to make concessions, including hiding the Bing brand, in an effort to persuade Apple to switch. However, Nadella acknowledged Apple’s power in choosing its search engine provider, stating, “Whomever they choose, they king-make.”
The significance of these revelations sheds light on the secretive dealings between tech giants and the influence of default search engine partnerships on the industry. As the case unfolds, it will be interesting to see the implications for Google, Apple, and the wider tech landscape.
Vocabulary List:
- Antitrust (noun): Legislation to protect consumers from predatory business practices.
- Monopolize (verb): To dominate or control the market for a particular product or service.
- Confidential (adjective): Intended to be kept secret or private.
- Enforcers (noun): Individuals or groups responsible for ensuring compliance with laws and regulations.
- Implications (noun): Possible effects or consequences of an action or decision.
- Partnerships (noun): Collaborative relationships between two or more entities for mutual benefit.
