Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) pay attention as U.S. President Joe Biden speaks throughout a roundtable with American and Indian enterprise leaders in 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 cellular phones and internet browsers in 2021, in accordance to a slide made public Friday in a federal antitrust trial towards the firm.
The quantity is a extra granular look into how a lot Google pays companions, together with Apple, to be the default search engine on their merchandise. The U.S. Department of Justice and a coalition of state attorneys basic have argued in the case that Google has illegally maintained its monopoly energy in basic search by leveraging its dominance to lock rivals out of key distribution channels, resembling Apple’s Safari internet browser.
The $26.3 billion determine doesn’t signify the funds to anyone firm, however Apple doubtless represents the largest recipient. Bernstein beforehand estimated Google could pay Apple as much as $19 billion this year for the out-of-the-box default placement on Apple gadgets.
“Google pays billions of {dollars} annually to distributors—together with popular-device producers resembling Apple, LG, Motorola, and Samsung; main U.S. wi-fi carriers resembling AT&T, T-Mobile, and Verizon; and browser builders resembling Mozilla, Opera, and UCWeb—to safe default standing for its basic search engine and, in many circumstances, to particularly prohibit Google’s counterparties from coping with Google’s opponents,” the DOJ criticism reads.
Google has argued that customers can nonetheless choose to change their default search engine with just a few clicks.
According to the slide proven in court docket Friday — titled “Google Search+ Margins,” which primarily refers to Google’s search enterprise — that division’s 2021 income was greater than $146 billion, whereas the portion of site visitors acquisition prices was greater than $26 billion.
The slide included numbers relationship again to 2014, when Google booked income of roughly $47 billion for the division and paid about $7.1 billion for the default standing. That means income for Search+ roughly tripled between 2014 and 2021, whereas this portion of TAC prices practically quadrupled.
While Google frequently stories general TAC, that quantity additionally contains the quantity Google pays to community companions for advertisements proven on their properties, in accordance to its 10-Okay submitting with the U.S. Securities and Exchange Commission.
The different portion of the general TAC determine Google stories in earnings consists of the funds it makes to “distribution companions who make out there our search entry factors and companies,” in accordance to the 10-Okay. Google says its “distribution companions embrace browser suppliers, cellular carriers, authentic tools producers and software program builders.” This is the portion of TAC that appeared to be represented by the slide, which referred solely to Search+ income.
A Google spokesperson declined to remark. An Apple spokesperson didn’t instantly reply to CNBC’s request for remark.
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