Why Google Pays Apple $18 Billion a Year: Insights from the US v. Google Trial
The $18 Billion Partnership Between Google and Apple: Unveiling the Secrets of the Tech Giants
In a recent report by The New York Times, it has been revealed that Google paid a staggering $18 billion to Apple in 2021 for the privilege of being the default search engine on Macs, iPads, and iPhones using Safari. This financial arrangement, which many have speculated about, sheds light on the intricate relationship between these tech giants.
This lucrative deal not only grants Google prime placement on Apple devices but also safeguards Apple from venturing into creating its own search engine. John Giannandrea, an ex-Google executive now heading Apple’s machine learning and AI, testified that Apple had contemplated alternatives, including buying Bing or developing its own search engine. However, they were concerned about competing with Google and losing their existing deal.
Microsoft CEO Satya Nadella suggested another reason for Apple’s continued partnership with Google. Nadella posited that Google might employ its popular apps like Gmail, Maps, and YouTube to steer users towards Chrome, potentially undermining Apple’s agreements with other search engines. This partnership, in essence, has served as a type of “peace treaty” between the two tech giants.
Recent revelations indicate that Google, in response to Apple’s improving Spotlight feature, explored ways to rival it with a similar Chrome feature, thereby safeguarding its position. Furthermore, Google sought to exploit new EU competition laws to increase Chrome’s user base.
This partnership between Google and Apple is now at the center of the ongoing US v. Google trial, with the Department of Justice arguing that it creates an anti-competitive monopoly. Witnesses have testified that any search engine given access to Apple’s vast market share could become a dominant player. Google, in its defense, contends that it pays $18 billion annually to maintain this partnership in the hope that users won’t switch, emphasizing its commitment to offering the best search engine.
As Google continues its trial defense, the intricate relationship between these tech giants and the enormous financial implications of their partnership remain in the spotlight.
