Alphabet Pays Apple 36 Percent Of Safari Search Revenue

Alphabet and Google CEO Sundar Pichai has confirmed the slice of revenue that Apple receives from the search engine giant.

On Tuesday Pichai confirmed that Google pays Apple 36 percent of Safari search revenue, under the terms of a default search agreement that is core to the Justice Department’s antitrust claims, CNBC reported.

Earlier this month Pichai had begun testifying in the biggest US antitrust case in a quarter century. The last major tech monopoly case was that of Microsoft in 1998, which ended in a settlement that forced the company to change some business practices.

Google antitrust

The DoJ had filed a civil antitrust suit against Google for monopolising search and search advertising back in 2020.

Google is also facing another antitrust lawsuit, after the DoJ, along with a number of Attorneys Generals from US states filed a civil antitrust suit against Google for monopolising multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act in January 2022.

Microsoft’s CEO Satya Nadella had recently testified against Google, stating that “everybody talks about the open web, but there is really the Google web.”

The DoJ has focused on Google signing multibillion-dollar agreements with the likes of Apple and others, to make Google search the default on their products.

Pichai has defended the huge amounts of money it pays to Apple and others to ensure that its search engine is the default search engine on their products.

Indeed it was reported that Google paid Apple $26 billion in 2021 to make its search engine default option.

Apple payment

Now according to the CNBC report, Pichai on Tuesday confirmed that Google pays Apple 36 percent of Safari search revenue, under the terms of the default search agreement.

Pichai was apparently testifying in a separate lawsuit filed against Google by Epic Games, the maker of Fortnite.

The 36 percent figure was revealed in open court on Monday, apparently by accident, by an expert witness testifying on Google’s behalf in the antitrust proceedings.

An attorney for Epic reportedly asked Pichai if the detail presented by Google’s witness was accurate. “That’s correct,” Pichai responded.

The Epic attorney then alleged that Google pays Samsung, Android’s largest hardware partner, less than half of what it pays to Apple. Pichai reportedly replied that while he didn’t know for certain, it was possible.

“It’s like apples and oranges,” Pichai reportedly said about the Samsung deal. He added that the deals sometimes pay carriers. In later questioning, Pichai said that Google competes “fiercely with Apple.”

CNBC reported that Google spent nearly $49 billion in Traffic Acquisition Costs in 2022. Google’s TAC costs include all of Google’s payments to companies such as Apple and Samsung to place its search engine in front of users.

The breakdown of Google’s revenue-sharing agreement with Apple had been not been revealed until the Monday disclosure in court from University of Chicago economics professor Kevin Murphy, CNBC reported.

Professor Murphy had been testifying on Google’s behalf and was responding to questions from Alphabet’s lead attorney, Williams & Connolly partner John Schmidtlein, when he revealed the figure.

The attorney for Epic also reportedly asked Pichai about the exact dollar amount it pays to Apple, to which Pichai said it was over $10 billion. But the attorney reportedly pushed back, contending the figure is actually $18 billion.

At the beginning of Tuesday’s trial session, lawyers for both Google and Apple had reportedly asked Judge James Donato to keep such figures concealed.