Google pays Apple $20 billion to stay top search on Safari
Legal proceedings often shed light on information that technology corporations would rather keep under wraps. Recently, details emerged about what companies like Google and Apple have been concealing.
1:03 PM EDT, May 7, 2024
In 2023, the United States Department of Justice charged Google, a subsidiary of Alphabet Inc., with monopolistic practices in the internet search and online advertising markets.
The trial is ongoing, and Google and its associates are required to disclose documents unveiling the inner workings of their operations. These revelations are proving to be quite revealing.
The cost for Google to remain the default search engine
The disclosed documents indicate that Apple was paid an astonishing $20 billion in 2022 to set Google as Safari's default browser.
This $20 billion annually breaks down to nearly $1.7 billion a month and almost $55 million a day, ensuring that new iPhones, iPads, and Macs preferentially direct users to Google for their queries.
Despite this substantial payment, the arrangement does not assure exclusivity. Users can switch their default search engine to alternatives like Bing, Yahoo, DuckDuckGo, or Ecosia. Google's significant investment essentially secures it a top spot among available choices.
The figures pertain solely to 2022, and it's plausible that these payments have increased since. Only in 2023 did Bing emerge as a formidable contender against Google, largely due to its integration with the artificial intelligence feature Copilot. Despite this technological advantage, Microsoft still faces challenges expanding its user base. Google's willingness to pay such high amounts primarily defends its market position.
Apple's pivotal role in the search engine market
The trial also uncovered that Microsoft had proposed that Apple receive 90 percent of advertising revenue for making Bing the default search engine on Apple devices. Nonetheless, Apple chose to stick with Google.
This struggle over the default search engine and online advertising dominion is particularly significant in the United States, where Apple holds a commanding smartphone market share. Tech giants understand that most users do not alter their device's default settings, a factor that could significantly influence market dynamics.
