In 2021, Alphabet Inc.'s GOOG GOOGL Google, led by Sundar Pichai, reportedly paid $26.3 billion to various partners, including Apple Inc. AAPL, to maintain its default search engine status on browsers and mobile devices.
What Happened: On Friday, a slide was made public in the federal antitrust trial against the search and advertising giant, which revealed this massive sum of money being paid to different entities, with Cupertino likely the largest beneficiary, estimated to receive as much as $19 billion for its role, reported CNBC.
As per the slide titled "Google Search+ Margins," presented in court, Google’s search business raked in over $146 billion in revenue in 2021, while expenses related to traffic acquisition costs exceeded $26 billion. This demonstrates a substantial growth in Google’s search revenue since 2014, along with a corresponding increase in traffic acquisition costs or TAC over the years.
See Also: Google’s Top Exec Lies Awake At Night As Amazon, TikTok Continue To Steal Users
For the unversed, the U.S. Department of Justice and state attorneys general have raised concerns over Google’s practices, alleging that the tech giant illegally preserves its monopoly in general search by using its influence to exclude competitors from vital distribution channels, such as Apple’s Safari web browser.
“Google pays billions of dollars each year to distributors, including popular device manufacturers like 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,” the DOJ complaint asserts.
However, Google has defended its practices, pointing out that users can easily change their default search engine with a few clicks.
Why It's Important: The trial's outcome could significantly affect Google and the broader tech industry.
Pichai is scheduled to testify on Monday, and he will likely discuss the company's competitive investments, particularly in the mobile search and search advertising sectors.
Previously, Microsoft CEO Satya Nadella also testified during the trial about the impact of Apple's selection of its default search engine, saying, "Whomever they choose, they king-make."
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