In a federal antitrust trial against Google, a slide presented on Friday disclosed that the tech giant paid $26.3 billion in 2021 to secure its position as the default search engine on mobile devices and web browsers.
This detailed figure provides a closer look at the sums disbursed by Google to various partners, with Apple likely being the foremost recipient.
The U.S. Department of Justice and a coalition of state attorneys have alleged that Google unlawfully maintained its monopoly in general search by utilizing its dominance to exclude competitors from crucial distribution channels, such as Apple’s Safari web browser.
It should be noted that the $26.3 billion does not represent payments to a single entity. However, Google’s payments to Apple to maintain default status on Apple devices were previously estimated by Bernstein to be as high as $19 billion for the current year.
The Department of Justice’s complaint outlines Google’s practice of paying substantial sums to various distributors, which encompass device manufacturers like Apple, LG, Motorola, and Samsung, major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon, as well as browser developers like Mozilla, Opera, and UCWeb. These payments secure default status for Google’s general search engine and, in many cases, restrict Google’s counterparts from collaborating with its competitors.
Google contends that users retain the option to change their default search engine with ease. According to the slide displayed in court, titled “Google Search+ Margins,” Google’s search division reported revenue exceeding $146 billion in 2021, while traffic acquisition costs amounted to over $26 billion.
The slide also included data dating back to 2014, when the division’s revenue was approximately $47 billion, and default status payments amounted to around $7.1 billion.
This indicates a tripling of revenue for the Search+ division from 2014 to 2021, while the related portion of traffic acquisition costs nearly quadrupled.
Google typically reports an overall TAC figure that encompasses payments made to network partners for displaying ads on their platforms, as per its 10-K filing with the U.S. Securities and Exchange Commission.
Additionally, Google’s earnings report contains a section that outlines payments to “distribution partners who make available our search access points and services,” as per the 10-K. The slide, however, seemed to specifically refer to the Search+ revenue.