In a groundbreaking revelation, court documents in the Justice Department’s antitrust lawsuit against Google have revealed that Alphabet Inc. paid Apple Inc. a whopping $20 billion in 2022. This payment was in exchange for Google being the default search engine in Apple’s Safari browser.
This deal has become central to the antitrust case, as enforcers argue that Google has monopolized the online search and advertising market. Closing arguments in the case are expected to take place on Thursday and Friday, with a decision anticipated later this year.
According to court documents, Google pays Apple a significant 36% of the revenue generated from search ads. In 2020, Google’s payments to Apple made up 17.5% of Apple’s operating income. This partnership between the two tech giants dates back to 2002, when Apple initially used Google as its default search engine for free. However, the agreement later evolved to include revenue sharing from search advertising.
By May 2021, Google was paying Apple over $1 billion each month to maintain its default search engine status. Interestingly, Microsoft Corp. made a bold attempt to sway Apple away from Google by offering to share a generous 90% of advertising revenue to make Bing the default search engine in Safari. Microsoft CEO Satya Nadella even testified that they were willing to hide the Bing brand if it meant winning over Apple.
The deal with Apple is crucial for Google, as it establishes the search engine for the most popular smartphone in the US. This ongoing legal battle sheds light on the intricate relationships between tech giants and the stakes involved in maintaining dominance in the competitive digital landscape.
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