The antitrust trial Google is facing in the U.S. is the most significant legal challenge in decades for Big Tech. The process is challenging Google’s privileged position in the search engine market, and is allowing all kinds of data to be uncovered about how the company has achieved that position. Its agreements with Apple have become one of the key points in the process, and although some really surprising information has already been revealed about the size of this alliance, we now know that the matter is actually even more complex.
Even more money. Data revealed in the trial already indicated that Google was paying Apple between $8 billion and $12 billion a year to be able to place its search engine as the default option on the iPhone and Safari on both mobile devices and Macs. Other sources talk about Google paying $18 billion in 2021 alone. Now Bloomberg reports that Kevin Murphy, a professor at the University of Chicago, revealed that Google also pays Apple 36% of what it earns from advertising that appears in Safari searches. And the question, of course, is how much money is that?
Billions. It is difficult to know because the specific figure of advertising revenue in Safari is unknown. As indicated in Engadget, considering that in 2022 Google earned $224 billion from advertising, Apple would receive “tens of billions of dollars” for that deal. This data, say sources covering the trial, is the biggest leak of the entire process.
Google is wrinkling its nose. Google’s lawyer, John Schmidtlein “visibly cringed” when that information was revealed. The company had sought to keep that data secret because it would otherwise “unjustifiably harm Google’s competitive position relative to both its competitors and other parties.”
Pay to dominate. The U.S. Department of Justice’s (DoJ) argument is blunt here: Google pays huge amounts of money to block competitors and lock users tied to its services. In September an Apple executive testified that the deal with Google was so lucrative that it caused Apple to halt development of its own search engine. Still that project, called “Pegasus,” appears to be on track regardless.
For interest I love you, Andres. It’s hard to know how much money Google devotes to this kind of deals, but it was revealed that in 2021 it devoted $26 billion in deals to put its default search engine on devices and browsers of various strategic allies such as Google, Samsung or Microsoft.
Having your search engine everywhere is very expensive. In addition to that amount, there are those additional agreements that, as in the case of Apple, mean that these companies also end up taking a good piece of the advertising pie. Jason Kint, CEO of Digital Content Next, estimated that Google will probably spend “at least $90 billion of its current annual revenue”, which in 2022 was $279.8 billion, on this type of alliance.
