May 24, 2024

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Antitrust court documents show that Google's payments to Apple reached $20 billion in 2022

Antitrust court documents show that Google's payments to Apple reached $20 billion in 2022

(Bloomberg) — Alphabet Inc. For Apple Inc. $20 billion in 2022 for Google to become the default search engine in Safari, according to newly unsealed court documents in the Justice Department's antitrust lawsuit against Google.

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The deal between the two tech giants is at the heart of the landmark case, in which antitrust officials allege that Google illegally monopolized the market for online search and related advertising. The Justice Department and Google will present closing arguments in the case on Thursday and Friday, and a decision is expected later this year.

Google and Apple had hoped to protect the payment amount from public disclosure. At trial last fall, Apple executives testified that Google paid “billions,” without specifying a number. A Google witness later accidentally revealed that Google pays 36% of the revenue it earns from search ads to Apple.

Court documents filed late Tuesday ahead of closing arguments mark the first public confirmation of the numbers by Apple's senior vice president of services, Eddy Cue. These numbers are not disclosed by either company in their securities filings. The documents also revealed the importance of the payments to Apple. For example, in 2020, Google's payments to Apple accounted for 17.5% of the iPhone maker's operating income.

The agreement with Apple is Google's most important virtual deal, because it defines the most widely used smartphone search engine in the United States.

Apple first agreed to use Google in its Safari browser in 2002 for free. But the companies later decided to share the revenue generated by search advertising. By May 2021, this led to Google paying Apple more than $1 billion a month for its default position, prosecutors said in the lawsuit.

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Microsoft, which runs rival search engine Bing, has repeatedly tried to tempt Apple to abandon its relationship with Google. The company offered to share 90% of its advertising revenue with Apple to make Bing the default in the Safari browser, according to court documents. These numbers were not previously disclosed.

Microsoft CEO Satya Nadella testified at trial last year that the company was willing to make a number of concessions, including hiding the Bing brand, to convince Apple to make the switch, which he said would be a “game changer.”

“Whoever they choose makes kings,” Nadella said of Apple.

—With assistance from Davey Alba, Mark Gurman, and Dina Bass.

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