Most searches conducted in Apple’s Safari browser, such as those on an iPhone, typically yield results from Google.
While users have the option to select a different search engine on Safari, the majority tend to default to Google. What might surprise you is the substantial amount Google pays Apple annually for this prominent position.
In the closing stages of a significant antitrust lawsuit against Google, recently unveiled figures reveal the extent of payments made to Apple for the privilege of being its primary search engine. These figures, exceeding $1 billion monthly by May 2021 and totaling as much as $20 billion in 2022, underscore the high stakes of the case. The lawsuit, initiated during the Trump administration, aims to challenge Google’s alleged monopolization of the online search industry through such payments, among other tactics.
As closing arguments proceed, government attorneys contend that Google maintained its monopoly through contractual agreements that ensured its search engine’s default position on numerous devices and browsers worldwide. These contracts, according to the Department of Justice, enabled Google to amass vast amounts of user data, which it utilized to refine its product, thereby stifling fair competition. The outcome of this case, expected later this year, could set a precedent not only for Google’s agreements with Apple but also for various other tech antitrust cases in progress.
Google has asserted that consumers opt for its search engine primarily due to its superior quality, rather than any anticompetitive practices. Furthermore, Google argues that its search engine contributes to the competitiveness of its Android operating system, which competes with Apple. Google contends that nothing prevented Apple from selecting an alternative default search partner.
However, Department of Justice (DOJ) attorneys have raised doubts regarding the rationale behind Google’s payments and contracts. They question why Google, if its product truly outperforms competitors and switching search engines is as simple as Google suggests, would spend tens of billions of dollars annually to secure its position as the default search provider across various platforms.
Throughout the trial proceedings, Judge Mehta has remained notably impartial, keeping his own opinions undisclosed. Last fall, as the trial concluded, he candidly admitted to both parties that he hadn’t made up his mind: “I can tell you, as I sit here today, I have no idea what I’m going to do,” Mehta remarked in November.
Consistently maintaining this stance, Mehta posed challenging inquiries to both sides during the initial day of closing arguments last Thursday. At one juncture, he directed a pointed question to Google’s attorney, John Schmidtlein, highlighting the immense hurdles for potential rivals to challenge Google’s dominant market position. Mehta referenced the substantial investment required not only for developing a competitive search engine but also for contending with Google’s contractual arrangements with major players like Apple: “If that’s what it takes for somebody to dislodge Google as the default search engine, wouldn’t the folks who wrote the Sherman Act be concerned about that?” he queried, alluding to the crucial US antitrust legislation. “I can’t conceive of a world in which some other competitor, particularly a new competitor, could do that. Microsoft couldn’t do it.”
Schmidtlein’s response underscored the distinction between safeguarding competitive processes and protecting individual competitors, as outlined in US antitrust law.
The timeline for Judge Amit Mehta’s decision following this week’s arguments remains uncertain. However, should he rule in favor of the US government, finding fault with Google, it would prompt further proceedings to determine the penalties Google might face.
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