For just a year, Google reportedly pays $18 billion to stay iPhone’s default search engine

Google finds itself in the hot seat amid an ongoing antitrust trial, a pivotal moment for the future of Google Search. The Department of Justice contends that the tech giant, in its quest for a dominant 90% share of the search market, has been funneling substantial sums of money. A recent report sheds light on the exact magnitude of this financial exchange.It has become clear that Google allocates billions annually to Apple, securing its status as the default search engine on Apple devices. According to The New York Times report, this figure amounts to around $18 billion per year. This payment ensures Google’s position as the default search engine on iPhones, iPads, and Macs.

Though this information pertains to 2021, it’s worth noting that the current sum may well exceed this reported amount. In 2021, speculation hinted at a $15 billion payment from Google to Apple for the iPhone’s default search engine status. However, the reality appears to surpass these estimates.

This financial arrangement proves mutually beneficial, as it is a substantial profit for Apple. On the other hand, it serves as a deterrent for Apple to venture into developing its own search engine or acquiring one—an option revealed during the trial. Apparently, Google prevented Apple from purchasing Bing, as revealed in court.

The dynamics of the Google/Apple agreement take on the semblance of a peace treaty, as suggested by The Verge. Microsoft CEO Satya Nadella, in his testimony, proposed an additional motive for Apple to maintain its pact with Google. He highlighted the potential repercussions if Google were absent from the equation.

Nadella argued that Google could leverage its widely-used apps like Gmail, Maps, and YouTube to promote Chrome and the Google app, potentially diverting users from Safari. Such a move could undermine the value of any alternative search engine deals Apple might explore.

As Google steps into the trial arena, its legal team contends that the company’s success is rooted in having the best search engine rather than eliminating competition. However, the substantial annual investment of $18 billion suggests a strategic move to retain users, despite Google’s claim that switching search engines is simple.