Jaap Arriens/NurPhoto via Getty Images
- Google paid Apple $18 billion in 2021 to remain the default search engine on iPhone, NYT reports.
- Google spent $26 billion in total in 2021 on similar deals with device makers, an ongoing court case revealed.
- The US Justice Department is suing Google over accusations that it's acted as a monopoly.
A much-watched trial between Google and the Justice Department is pulling back the layers of the relationship between Google and Apple — and how it evolved over time.
And we now know just how much Google has been paying Apple and other device makers to ensure its search engine remains the default on many devices, including the iPhone.
In 2021, Google paid Apple about $18 billion to stay as Apple's top search engine, according to The New York Times, which cites two sources familiar with the deal. That lines up with what Bernstein analysts estimated earlier in October, pegging the value at $18 billion to $20 billion a year, "accounting for 14-16% of Apple's operating profits."
The ongoing court case also revealed on Friday that the total amount Google paid in 2021 to device-makers, including Apple, for default search-engine deals was an eye-watering $26.3 billion, Bloomberg reported. The Apple deal represented the lion's share of that amount, and it just highlights how much Google is willing to pay to keep its search engine front and center.
Apple does have its own search tool, the Spotlight feature, which is available to those with iPhones, iPads, and Mac computers. Spotlight is not a new concept, it's been on Apple devices since 2005, but it could be considered a potential competitor to Google. The tool allows users to look up news, weather, and the meaning of words and phrases. The results look similar to those people could find on other search engines.
Google wanted to ensure that it wouldn't have to worry about competing with Apple on the search front, according to recent report from The New York Times, and the value of that privilege has ballooned considerably in the last decade. Back in 2014, Google paid Apple $1 billion to stay on iOS devices, court documents revealed in a separate case involving Oracle.
Neither Apple nor Google responded to Insider's request for comment ahead of publication.
The Department of Justice originally filed the suit against Google in 2020, claiming that the search engine was a monopoly that was hurting the ability of smaller companies to compete.
The ongoing trial is investigating Google's relationship with companies like Apple and device-makers running Android. The DOJ has argued that Google made it intentionally difficult to switch from Google to other search engines on iPhones and Android, with a government witness testifying that it took 10 steps to switch the default search engine on a phone running Android 12.
Still, Kent Walker, general counsel of Google's parent company Alphabet, said in a response letter that people use the Google search engine because it is superior to its competition, not because they are pushed to use it. Walker also argued that people do have the option to switch platforms if they want and that doing so isn't that difficult.
Apple executive Eddy Cue also testified earlier in the case that the company went with Google as the default search engine because it was the "best" for iPhone users and there "wasn't a valid alternative."