Google's Forced Hand Worth Billions

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Google's Forced Hand Worth Billions

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Google has forced its hand with the power of defaults. That's what the U.S. Justice Department alleges as it reveals some very secretive strategies the Alphabet company has used for years.

Contracts make Google Search the default option on iPhones, Android devices and browsers like Firefox and Opera in exchange for a portion of the advertising revenue.

The U.S. government alleges that those agreements have helped Google create an internet search monopoly to maintain dominance. Many of Google’s businesses dealings have begun to emerge, despite rules intended to preserve confidentiality of sensitive business information.

Apple on Wednesday protested against those numbers that the Justice Department mentioned in its opening statement of the government’s anti-monopoly trial against Google.

Ryan Travers, an attorney representing Apple, complained that government attorneys may have violated rules. Travers said two numbers mentioned in passing in the Justice Department’s opening statement might create a “misperception” that they came from Apple’s confidential information, according to the Washington Post.

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The Justice Department mentioned two specific numbers for the amounts Google was said to have paid Apple for two of the years in question — $4 billion to $7 billion. And although Apple did not comment on the accuracy of the numbers, the company did object to something else -- people might think they came from Apple.

However, the numbers were based on external sources, not from privileged information from Apple or Google, according to Justice Department attorney Kenneth Dintzer.

Google for many years has paid Apple large sums of money to remain the company’s default search engine on iPhones, iPads and other Apple devices. In exchange, Google gets huge amounts of traffic — building profit from advertising and sponsored results.

While the companies have always kept the amount close to the vest, 9To5Mac got a glimpse into this arrangement in 2014, when a court case revealed the sum to be $1 billion, which at the time comprised a percentage of the revenue generated – about 34%.

The sum since then is believed to have steadily increased. It was estimated at $3 billion in 2017, $9 billion in 2018 and $10 billion in 2020. That number rose to between $18 billion and $20 billion last year.

Apple includes the sum in its Services category, so it is not identifiable as a specific revenue source, according to 9To5Mac.

 

 

 

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September 14, 2023 at 02:54PM