Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders within the East Room of the White House in Washington, D.C., on June 23, 2023.
Anna Moneymaker | Getty Images
Google paid $26.3 billion to be the default search engine on mobile phones and web browsers in 2021, in keeping with a slide made public Friday in a federal antitrust trial against the corporate.
The number is a more granular look into how much Google pays partners, including Apple, to be the default search engine on their products. The Department of Justice and a coalition of state attorneys general have argued within the case that Google has illegally maintained its monopoly power normally search by leveraging its dominance to lock rivals out of key distribution channels, akin to Apple’s Safari web browser.
The $26.3 billion figure doesn’t represent the payments to anyone company, but Apple likely represents the most important recipient. Bernstein previously estimated that Google could pay Apple as much as $19 billion this 12 months for the out-of-the-box default placement on Apple devices.
“Google pays billions of dollars annually to distributors—including popular-device manufacturers akin to Apple, LG, Motorola, and Samsung; major U.S. wireless carriers akin to AT&T, T-Mobile, and Verizon; and browser developers akin to Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in lots of cases, to specifically prohibit Google’s counterparties from coping with Google’s competitors,” the DOJ criticism reads.
Google has argued that users can still opt to vary their default search engine with just a few clicks.
Based on the slide shown in court on Friday — titled “Google Search+ Margins,” which primarily refers to Google’s search business — that division’s 2021 revenue was greater than $146 billion, while the portion of traffic acquisition costs (TAC) was greater than $26 billion.
The slide included numbers dating back to 2014, when Google booked revenue of roughly $47 billion for the division and paid about $7.1 billion for the default status. Which means revenue for Search+ roughly tripled between 2014 to 2021, while this portion of TAC costs nearly quadrupled.
While Google usually reports overall TAC, that number also includes the quantity Google pays to network partners for ads shown on their properties, in keeping with its 10-K filing with the Securities and Exchange Commission.
The opposite portion of the general TAC figure Google reports in earnings consists of the payments it makes to “distribution partners who make available our search access points and services,” in keeping with the 10-K. Google says its “distribution partners include browser providers, mobile carriers, original equipment manufacturers, and software developers.” That is the portion of TAC that gave the impression to be represented by the slide, which referred only to Search+ revenue.
A Google spokesperson declined to comment. An Apple spokesperson didn’t immediately reply to a request for comment.
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