Google allegedly paid $26 billion to be default search engine on browsers, phones in 2021: Reports

Alphabet’s Google paid $26.3 billion to be the default search engine on mobile phones and web browsers in 2021, according to American media reports. The figure was revealed on Friday (Oct 27) amid the ongoing once-in-a-generation antitrust fight over Google’s dominance of search and some parts of search advertising.

The amount of payments Google made for the default status has more than tripled since 2014, according to senior executive Prabhakar Raghavan, who testified during the United States justice department’s antitrust trial and is responsible for Google's both search and advertising, reported Bloomberg.

What do we know?

A report by CNBC citing a slide made public during the federal case provided an insight on how much Google pays its partners, including Apple in a bid to ensure that they are the default search engine on their products.

In 2021, Google made $146.4 billion just from search advertising, but the payments for the default setting were its biggest cost, Raghavan was mentioned as saying in the report by Bloomberg.

It is also speculated that a lion’s share of the $26.3 billion figure – which does not represent Google’s payments to just one company – was likely given to Apple.

CNBC citing a report by Bernstein, said it is estimated Google could pay Apple a whopping $19 billion this year to be the default search engine on Apple devices.

The tech giant has previously argued its revenue share agreements are legal and that it has invested to keep its search and advertising businesses competitive.

According to the report by Bloomberg, Judge Amit Mehta, who is presiding over the case also asked Google to disclose the numbers which the tech giant had previously objected to saying that it would affect their ability to negotiate contracts in the future.

Google has also argued that people can opt for a different search provider if they are dissatisfied with defaults and they do switch.

According to CNBC, the slide shown on Friday titled “Google Search+ Margins,” showed that the division’s 2021 revenue stood at over $146 billion while traffic acquisition costs were more than $26 billion.

The slide reportedly had numbers dating back to 2014 when the tech giant booked revenue of roughly $47 billion for the division and paid around $7.1 billion for the default status.

This indicates that not only did the revenue for Google Search+ tripled but also the portion of traffic acquisition costs increased nearly four times.

What is the case about?

The United States government has said that Google illegally paid an estimated $10 billion every year to smartphone makers like Apple and wireless carriers like AT&T and others to be the default search engine on their devices in order to stay on top.

The court is also expected to hear from Google CEO Sundar Pichai on Monday (Oct 30).

(With inputs from agencies)

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