Google’s $26.3 Billion Payments for Default Search Engine Status Revealed in Antitrust Trial
New details have emerged in the federal antitrust trial against Google, revealing that the tech giant paid $26.3 billion in 2021 to secure its position as the default search engine on mobile phones and web browsers. This figure provides a closer look at the payments made to partners, including Apple, for the default search engine placement. The U.S. Department of Justice and state attorneys general argue that Google has unlawfully maintained its monopoly power in general search by leveraging its dominance to exclude competitors from key distribution channels, such as Apple’s Safari browser.
While the $26.3 billion does not represent payments to a single company, it is likely that Apple is the largest recipient. Analysts previously estimated that Google could pay Apple up to $19 billion this year for default placement on Apple devices. The DOJ complaint states that Google pays billions each year to various distributors, including device manufacturers, wireless carriers, and browser developers, to secure default status for its search engine and restrict competitors’ access to its counterparties.
Google contends that users have the option to change their default search engine with a few clicks. However, the slide presented in court reveals that Google’s search division generated over $146 billion in revenue in 2021, with traffic acquisition costs exceeding $26 billion. Comparing these figures to those from 2014, revenue for the search division tripled, while the portion of traffic acquisition costs nearly quadrupled.
It’s important to note that Google’s reported traffic acquisition costs include payments to network partners for displaying ads on their platforms. The specific payments made to distribution partners for search access points and services constitute the portion of traffic acquisition costs referred to in the slide.
Google and Apple have not provided official comments on the matter. The trial continues to shed light on Google’s practices and the extent of its payments to secure default search engine status.
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