Google's Massive Payment to Apple Unveiled in Court
In a startling revelation from the ongoing Department of Justice (DoJ) antitrust lawsuit against Google, court documents have exposed a $20 billion payment made by the search giant to Apple in 2022. This enormous sum was part of an agreement to maintain Google's status as the default search engine on Apple's Safari browser across its ecosystem of devices.
The Deal's Significance
- Google pays Apple 36% of its Search ad revenue
- The payment constituted 17.5% of Apple's operating income in 2020
- By May 2021, Google was paying Apple over $1 billion monthly
This long-standing arrangement, which began in 2002, has been a closely guarded secret by both tech behemoths. The deal's exposure raises significant questions about market competition and the power dynamics between two of the world's most influential tech companies.
Competitive Concerns
Microsoft CEO Satya Nadella has criticized the agreement, arguing it stifles competition for alternative search engines like Bing. Nadella revealed that Microsoft had previously attempted, without success, to become Safari's default search provider.
Apple's Defense
Apple's senior vice-president of services, Eddy Cue, defended the choice in court, citing concerns about competitors' ability to match Google's quality and functionality. Apple maintains that Google offers the best search experience for its users.
Antitrust Implications
The DoJ's lawsuit alleges that Google has monopolized online search and related advertising. If Google loses the case, this lucrative deal with Apple could be nullified, potentially reshaping the search engine landscape.
What's Next
Closing arguments in the antitrust case are scheduled for this week, with a final decision expected sometime in 2024. The outcome could have far-reaching consequences for both companies and the broader tech industry.
User Options
Despite the default setting, iPhone users can change their Safari search engine:
- Go to Settings > Safari
- Under Search, tap on Search Engine
- Choose from options including Google, Yahoo, Bing, DuckDuckGo, and Ecosia
As this high-stakes legal battle unfolds, it's clear that the relationship between Google and Apple has been more financially intertwined than previously known, raising important questions about market competition and consumer choice in the digital age.