The antitrust lawsuit against Google‘s parent company, Alphabet Inc. GOOGL GOOG has revealed that the company paid Apple Inc. AAPL a staggering $20 billion in 2022 for Google to be the default search engine in the Safari browser.
What Happened: The payment details were disclosed in court documents that were unsealed on Tuesday, Bloomberg reported. This deal is a central point in the antitrust case, with regulators alleging that Google has unlawfully monopolized the online search and related advertising market.
The Justice Department and Google are scheduled to present their closing arguments in the case on Thursday and Friday, with a ruling expected later this year.
The payment amount had been kept confidential by both companies, with Apple executives testifying last fall that Google paid “billions” without specifying an exact figure.
However, a Google witness later accidentally revealed that Google pays 36% of the revenue it earns from search ads to Apple. The court documents, filed by Apple’s senior vice president of services, Eddy Cue, mark the first public confirmation of the payment figures.
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Google’s payments to Apple are not disclosed in either company’s securities filings. The documents also highlight the significance of these payments to Apple’s bottom line, with Google’s payments in 2020 constituting 17.5% of the iPhone maker’s operating income.
Why It Matters: The $20 billion payment from Google to Apple is a significant revelation in the ongoing antitrust case. This case has been a long-standing issue, with Google facing scrutiny for its alleged monopolistic practices in the online search and advertising market.
Despite the ongoing legal challenges, Google has continued to maintain its dominance in the search engine market. In 2023, Apple’s iOS 17 update introduced a subtle shift that allowed users to opt for a search engine other than Google’s while using the internet in private mode. This move was seen as a challenge to Google’s search engine dominance.
Earlier, Google CEO Sundar Pichai had expressed concerns about the optics of the deal with Apple, highlighting the significance of this agreement in the tech industry.
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