For a long time, Google could remove Safari as the default search engine on its platform, Apple also has a backup plan for this case. But why hasn’t Apple been able to replace the world’s No. 1 search engine right on its home turf?
It’s no secret, Google itself pays Apple a sum of money each year to ensure the search engine’s default position on Safari for Mac, iPad and iPhone. This is what any technology wants, including Microsoft.
But, what is the specific amount that Google must pay to Apple to become Apple’s default search engine? The exact figure, the terms associated with this financial arrangement, and the consequences of its potential termination have been at the heart of the ongoing US v. Google trial, with most of this information being closely guarded within the courtroom.
A recent report in The New York Times sheds light on a specific number, stating that Google shelled out “around $18 billion” to Apple in 2021.
During the trial, various speculations and rumors surfaced, ranging from as low as $10 billion to as high as $20 billion, so this figure doesn’t come as a complete surprise. Nevertheless, it falls on the higher end of expectations.
This massive financial deal not only secures Google’s prominent presence on Apple devices but also served as a deterrent for Apple to venture into developing its own search engine.
Former Google executive John Giannandrea, now heading Apple’s machine learning and AI division, revealed during the trial that Apple had considered various options, from acquiring Bing to creating its own search engine. However, Apple was apprehensive about competing with Google and jeopardizing its lucrative agreement.
During his testimony, Microsoft CEO Satya Nadella suggested another compelling reason for Apple to maintain its deal with Google: the fear of Google causing disruption if the partnership ended.
Google could utilize its highly popular apps, such as Gmail, Maps, and YouTube, to promote Chrome and the Google app, diverting users away from Safari and potentially diminishing the value of any other search engine deal Apple might strike. In essence, the Google/Apple partnership was not just mutually beneficial but could also be likened to a peace treaty.
According to The New York Times, it appears Nadella’s perspective was accurate. Recent developments indicate that, in response to the improvements made to Apple’s built-in Spotlight feature, Google sought ways to undermine it by integrating a similar feature into Chrome.
This feature presented users with rapid access to facts and information from their device’s files, messages, and apps. Google also explored leveraging the new EU competition laws to encourage more users to switch to Chrome.
The terms and consequences of Apple’s arrangement with Google are central to the US v. Google trial, with the Justice Department arguing that it amounts to an anti-competitive monopoly. Witness after witness has attested that any search engine with access to Apple’s vast market share would instantly become a major player.
For instance, Nadella stated that Apple effectively has the power to “king-make” with its choice of defaults and that he was willing to lose as much as $15 billion annually to have Bing in that coveted spot.
However, recently, project construction documents recorded that Google paid more than 26 billion USD in 2021. CEO Sundar Pichai said this payment is part of the promotion of upgraded equipment. Google is set to present its case in the ongoing trial, with the company’s attorneys preparing to make their arguments in the coming weeks.
So far, Google’s primary argument has been that its success stems from being the best search engine rather than forcing out competitors, despite the fact that it pays a staggering amount annually to maintain its position.
