Google reportedly pays $18 billion a year to be Apple’s default search engine

Google reportedly pays $18 billion a year to be Apple’s default search engine
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Google pays Apple billions of dollars every year to be the default search engine in Safari on Macs, iPads, and iPhones. That, we’ve known for a long time. But exactly how many billions Google pays, what strings are attached to that money, and what might happen if it went away? Those have been the questions raised repeatedly in the ongoing US v. Google trial, and most of the numbers have been reserved for a closed courtroom.

But now, a New York Times report offers a specific figure: it says Google paid Apple “around $18 billion” in 2021. We’ve been hearing educated guesses and rumors during the trial as low as $10 billion and as high as $20 billion, so this number isn’t totally shocking. But it’s at the high end of expectations.

That money not only gives Google prime placement on Apple devices but it also has historically kept Apple from building its own search engine. John Giannandrea, a former Google executive who now runs machine learning and AI at Apple, testified during the trial that Apple had considered everything from buying Bing to building its own search engine but worried both about competing with Google and losing its deal.

When Microsoft CEO Satya Nadella testified, he posited another reason for Apple to keep the Google deal going: Google might cause trouble if it went away. Google could use its ultra-popular apps like Gmail, Maps, and YouTube to promote Chrome and the Google app, diverting people away from Safari and potentially submarining the value of Apple’s deal with any other search engine. In that sense, not only was the Google / Apple deal mutually beneficial but it may have also been something like a peace treaty.

Not only was the Google / Apple deal mutually beneficial but it was also something like a peace treaty

According to the Times report, Nadella was right. In recent years, threatened by improvements to Apple’s built-in Spotlight feature, Google apparently looked for ways to undercut Spotlight by building a similar feature into Chrome, which “presented users with quick facts and information from files, messages and apps on the device.” Google also began to explore how to use the new EU competition laws to get even more people to switch to Chrome.

The terms and effects of Apple’s deal with Google have become the centerpiece of the US v. Google trial. The Justice Department has argued it amounts to an anticompetitive monopoly, as witness after witness testifies that any search engine with access to Apple’s massive market share would immediately become a power player. (Nadella testified that Apple can effectively “king-make” with its choice of defaults and that he was willing to lose as much as $15 billion a year to get Bing in that spot.)

Google is beginning its portion of the trial on Thursday, and the company’s attorneys will spend the next few weeks making their case. So far, that case has been primarily that Google succeeds not because it forces out rivals but because it is the best search engine. It’s easy for people to switch, Google argues — but it apparently pays $18 billion a year in hopes that they won’t.

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