Google allegedly pays Apple billions to keep out of search engine business

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According to a lawsuit, Google pays Apple ‘billions’ per year not to build its own search engine. In accordance with an agreement with Google, Apple will not develop its own internet search engine. An allegation in a class action lawsuit is that Google is required to pay the company so long as it remains the default option in Safari. Class-action lawsuits in the United States have revealed details of the deal, which has been hailed as illegal and contrary to antitrust laws. As a result of the agreement, Google will be part of the Apple ecosystem. Apple’s Safari browser also uses Google’s search engine by default rather than its own. A company of Apple’s scale could easily build a similar search engine out of scratch. 

Apple CEO Tim Cook and Google CEO Sundar Pichai allegedly met on a regular basis and discussed how Google could share its profits with Apple in exchange for preferential treatment on devices such as the iPhone and iPad, according to the complaint. Google is paying Apple around $8-12 billion per year for allowing the search engine to serve as its default search engine on its devices, according to The New York Times. Google may have spent $15 billion in 2021 on keeping the status quo, according to one analyst. Furthermore, the UK Competition and Markets Authority described the arrangement as a “significant barrier to entry and expansion in the search engine market” and asked enforcement authorities to explore options to correct the situation between Apple and Google so that other search engines are free to compete.

Apple devices are just too prevalent in the world. Google generates an enormous amount of traffic by making it the default search engine on those devices. Google gets nearly half of its search traffic from Apple devices, according to a report by The New York Times. By 2020, Google is expected to generate $104 billion in search advertising revenue. 71% of Google’s total advertising revenue was derived from this, while 57% of Alphabet’s revenue came from this. Through Apple devices, these ads are delivered to the right people. Thus, it makes perfect sense for Google to pay this kind of sum to one of its rivals.

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