Google pays Apple billions of dollars a year to be the default search engine in Safari on Macs, iPads and iPhones. We have known this for a long time. But how much did Google pay out, what strings were attached to the money, and what would happen if the money stopped being paid out? These are questions raised repeatedly in the ongoing United States v. Google case, and most of the numbers are being kept in closed court.
But now, a New York Times report offers a concrete number: It says Google paid Apple "about $18 billion" in 2021. We heard everything from as low as $10 billion to as high as $20 billion during the trial, so the number isn't entirely shocking.
Not only does the money give Google primacy on Apple devices, it also historically prevents Apple from developing its own search engine. John Giannandrea, a former Google executive who now runs machine learning and artificial intelligence at Apple, testified during the trial that Apple considered everything from acquiring Bing to building its own search engine, but was worried about both competing with Google and losing the deal.
When Microsoft CEO Satya Nadella testified, he offered another reason for Apple to continue its deal with Google: the potential for trouble if Google disappeared. Google could leverage ultra-popular apps like Gmail, Maps and YouTube to promote Chrome and Google apps, diverting attention away from Safari and potentially undermining the value of Apple's deal with any other search engine. In this sense, the Google/Apple deal is not only mutually beneficial, but may also feel like a peace treaty.
According to the Times, Nadella is right. In recent years, threatened by improvements to Apple's built-in Spotlight feature, Google has apparently sought ways to weaken Spotlight by building a similar feature into Chrome, which "provides users with quick facts and information from files, messages and apps on their device." Google has also begun exploring how to use new EU competition laws to get more people to switch to Chrome.
The terms and effects of Apple's deal with Google have become the core content of the U.S. v. Google trial. The Justice Department argued that this amounted to an abuse of monopoly position, as witness after witness demonstrated that any search engine that could capture Apple's massive market share would immediately become a powerful player. (Nadella testified that Apple could effectively "become king" with the default option, and that he was willing to lose up to $15 billion a year to get Bing into that position.)
Part of the Google antitrust trial is set to begin on Thursday, with the company's lawyers expected to present their case in the coming weeks. In the company's view, Google's success so far is not because it has squeezed out competitors, but because it is by far the best search engine.