Google paid $26 billion in 2021 to become a default search engine
Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House in Washington, D.C., on June 23, 2023.
Anna Moneymaker | Getty Images
Google paid $26.3 billion to be the default search engine on mobile phones and web browsers in 2021, according to a slide made public Friday in a federal antitrust trial against the company.
The number is a more granular look into how much Google pays partners, including Apple, to be the default search engine on their products. The U.S. Department of Justice and a coalition of state attorneys general have argued in the case that Google has illegally maintained its monopoly power in general search by leveraging its dominance to lock rivals out of key distribution channels, such as Apple’s Safari web browser.
The $26.3 billion figure does not represent the payments to any one company, but Apple likely represents the largest recipient. Bernstein previously estimated Google could pay Apple as much as $19 billion this year for the out-of-the-box default placement on Apple devices.
“Google pays billions of dollars each year to distributors—including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb—to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors,” the DOJ complaint reads.
Google has argued that users can still opt to change their default search engine with a few clicks.
According to the slide shown in court Friday — titled “Google Search+ Margins,” which primarily refers to Google’s search business — that division’s 2021 revenue was more than $146 billion, while the portion of traffic acquisition costs was more than $26 billion.
The slide included numbers dating back to 2014, when Google booked revenue of roughly $47 billion for the division and paid about $7.1 billion for the default status. That means revenue for Search+ roughly tripled between 2014 and 2021, while this portion of TAC costs nearly quadrupled.
While Google regularly reports overall TAC, that number also includes the amount Google pays to network partners for ads shown on their properties, according to its 10-K filing with the U.S. Securities and Exchange Commission.
The other portion of the overall TAC figure Google reports in earnings consists of the payments it makes to “distribution partners who make available our search access points and services,” according to the 10-K. Google says its “distribution partners include browser providers, mobile carriers, original equipment manufacturers and software developers.” This is the portion of TAC that appeared to be represented by the slide, which referred only to Search+ revenue.
A Google spokesperson declined to comment. An Apple spokesperson did not immediately respond to CNBC’s request for comment.
WATCH: How US antitrust law works, and what it means for Big Tech
Don’t miss these CNBC PRO stories:
