Google claims it doesn't have a monopoly over search, but pays $26 billion to Apple and others for default status, bombshell testimony reveals
How the U.S. v. Google antitrust case shakes out remains to be seen, but one thing it’s exposed is just how much the company is willing to pay to be the default search option across devices and platforms. That, of course, is information that Google wants kept private—it argues that disclosure will hurt its ability to negotiate contracts—but the judge in the case, Amit Mehta, wants greater openness in the trial and has ordered that certain numbers be revealed.
As a result, we now know the amount Google paid to be the default search engine in various browsers, phones, and platforms—in one particular year, at least. According to testimony on Friday by Prabhakar Raghavan, a senior executive responsible for search and advertising at Google, the tech giant paid $26.3 billion to other companies for the privilege in 2021. The payments for the defaults, Raghavan added, were the company’s biggest cost.
The sum is staggering, but seems less so when compared to the revenue that Google earned from search advertising that same year: $146.4 billion.
When approached by Fortune, Google pointed to its trial response, in which Kent Walker, president of global affairs, argues that “our success comes down to the quality of our products, not the quantity of our contracts.”
But, obviously, Google bids on the default settings because they do matter, as spokesperson Peter Schottenfels acknowledged to the New York Times. And as Walker writes: “Browser makers like Apple and Mozilla choose to feature a default search engine. They open competition for the default and pick the best search provider for their users. We compete hard for that placement, so that users can easily access Google Search.”
The question at hand is whether the deals Google has struck with Apple and others are anticompetitive.
“This case is about the future of the internet and whether Google’s search engine will ever face meaningful competition,” Kenneth Dintzer, the Justice Department’s lead litigator, said during opening arguments last month. As far back as 2010, he argues, Google has maintained an illegal monopoly, with its role as the default engine across much of the internet being a key factor.
One upshot of the trial could be that the tech giant is forced to stop paying companies to make Google the default on various devices. Critics, meanwhile, contend the government should force Google to make it easier for Android users to set the default to rival services.
Another revelation from the trial suggesting how important defaults are to Google was highlighted by The Verge. Jim Kolotouros, vice president of Android platform partnerships, wrote in an internal email in 2020: “Chrome exists to serve Google search. If it cannot do that because it is regulated to be set by the user, the value of users using Chrome goes to almost zero (for me).”
