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 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 cellphones and net browsers in 2021, based on a slide made public Friday in a federal antitrust trial in opposition to the corporate.
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 common have argued within the case that Google has illegally maintained its monopoly energy normally search by leveraging its dominance to lock rivals out of key distribution channels, equivalent to Apple’s Safari net browser.
The $26.3 billion determine doesn’t characterize the funds to anyone firm, however Apple doubtless represents the biggest recipient. Bernstein beforehand estimated Google might pay Apple as a lot as $19 billion this yr for the out-of-the-box default placement on Apple gadgets.
“Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors,” the DOJ criticism reads.
Google has argued that customers can nonetheless choose to alter their default search engine with a number of 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 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 almost quadrupled.
While Google commonly stories general TAC, that quantity additionally contains the quantity Google pays to community companions for adverts proven on their properties, based on its 10-Ok 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 partners who make available our search access points and services,” based on the 10-Ok. Google says its “distribution partners include browser providers, mobile carriers, original equipment manufacturers and software developers.” This is the portion of TAC that seemed 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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