Google Reportedly Pays $18 Billion a Year to be Apple’s Default Search Engine

In the ongoing US v. Google trial, revelations about the complexities of the deal between Apple and Google for default search engine placement on Apple devices have been brought to the forefront. A recent New York Times report disclosed that Google reportedly paid around $18 billion to Apple in 2021 for this privilege, highlighting the vast scale of the financial arrangement.

While the exact figures have been shrouded in secrecy, this reported number aligns with some industry speculations, underscoring the extensive investment Google has made for its prime position in the Apple ecosystem. It’s a staggering figure that exceeds many estimates, shedding light on the considerable financial entanglement between the tech giants.

The financial arrangement has not only given Google significant visibility on Apple devices but has, for years, deterred Apple from venturing into developing its own search engine. A former Google executive, now spearheading machine learning and AI at Apple, testified during the trial that Apple had contemplated alternatives, including the acquisition of Bing or creating a proprietary search engine. However, fears of competing with Google and the risk of losing the lucrative deal led to reluctance in taking those paths.

Microsoft CEO Satya Nadella, in his testimony, emphasized another dimension to the Google-Apple relationship, suggesting that the deal may have more strategic implications. Nadella implied that Google could potentially disrupt Apple’s ecosystem by diverting users to their browser and apps, thus undermining any potential deals Apple might make with other search engines.

Further insights from the Times report highlighted Google’s attempts to undercut Apple’s built-in Spotlight feature by incorporating a similar function into Chrome, potentially diverting attention from Apple’s proprietary tools. Additionally, it was revealed that Google explored leveraging EU competition laws to bolster Chrome’s user base.

The intricate terms and consequences of the Apple-Google agreement have emerged as the focal point of the US v. Google trial. The Justice Department has presented the deal as potentially monopolistic, arguing that any search engine that gains access to Apple’s vast user base would instantly gain significant influence. Witness statements, such as Nadella’s claim that Apple holds significant power in setting defaults, further add to this argument.

As Google begins its defense in the trial, it is expected to assert that its search engine is preferred due to its quality, contending that user choices are not restricted, although the reported $18 billion annual payment signifies its investment in securing prime positioning on Apple devices. The trial continues to unravel the intricacies of the tech industry’s competitive landscape and the impact of the lucrative Apple-Google deal.