According to a slide released on Friday in a federal antitrust trial against the firm, Google paid $26.3 billion to be the default search engine on mobile devices and web browsers in 2021.
This figure provides a more detailed analysis of the payment Google pays its partners, such as Apple, to have their search engine set as the default on their devices. In the lawsuit, the U.S. Department of Justice and a group of state attorneys general have contended that Google has unlawfully kept its monopoly on general search by using its supremacy to bar competitors from important distribution channels, like Apple’s Safari web browser.
Although Apple most likely represents the greatest recipient, the $26.3 billion sum does not represent payments to any single company. According to Bernstein’s earlier estimates, Google would have to pay Apple up to $19 billion this year in exchange for default placement on Apple devices.
As stated in the DOJ complaint, that “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.”
Google has maintained that consumers still have the option to quickly switch their preferred search engine.
The “Google Search+ Margins” slide, which mainly covers Google’s search business, was displayed in court on Friday. It shows that the division’s revenue for 2021 exceeded $146 billion, while the portion of costs associated with traffic acquisition above $26 billion.
The slide had data going all the way back to 2014, when Google recorded sales for the business in the range of $47 billion and paid roughly $7.1 billion for the default position. In other words, while this part of TAC costs nearly quadrupled between 2014 and 2021, Search+ revenue nearly tripled.
While Google provides aggregate TAC on a regular basis, its 10-K filing with the U.S. Securities and Exchange Commission states that this figure also includes the amount Google pays network partners for marketing displayed on their properties.
Payouts to “distribution partners who make available our search access points and services” make up the remaining component of the total TAC amount that Google reports in earnings, according the 10-K. According to Google, its original equipment makers, software developers, browser providers, and mobile carriers are among its distribution partners. This is the part of TAC that the slide, which only stated Search+ revenue, appeared to represent.
