Google allegedly pays Apple more than a third of revenue generated from ads that surface on Safari, according to new testimony from the United States’ antitrust case against Google’s parent company Alphabet (via Bloomberg).
According to the economics professor at the University of Chicago Kevin Murphy, Google pays Apple around 36% of the total revenue generated from selling ads on the latter’s Safari browser on iPhone, iPad, and Mac. The ad revenue sharing agreement is part of a deal involving both companies that allows Google’s search engine to be the default option on Safari across all Apple devices, a deal that has been in place since 2002.
The deal has been particularly scrutinized by the United States Department of Justice (DOJ) as it takes on Alphabet in a longstanding antitrust case that targets Google’s monopoly over the search engine and advertising markets. Google pays Apple billions of dollars annually to remain Safari’s default search engine, and Cue recently testified as part of the case. On the stand, Cue testified that Apple is forced to rely on Google as no other options come close to the quality of its search engine.
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While Apple and Google have been tight-lipped over revealing key details of their agreement, some will inadvertently make their way to the public as part of the DOJ’s case. Recent estimates peg the figure at $20 billion dollar as recently as 2022, with the sum quickly rising on an annual basis throughout the last decade. The sum represents a significant chunk of the profit that Apple generates annually, which ranges anywhere between 15-20% of the Cupertino company’s turnover.
Other interesting tidbits were also revealed surrounding the case. Bloomberg reported that Microsft approached Apple to acquire Bing back in 2020 with the goal of it becoming the new default search engine, but talks over the deal collapsed early on.
Apple is also in the process of very early exploratory work on creating its own in-house search engine that’s based on an internal engine for many of Apple’s apps and services, but it will be a while before we see a true “Apple Search” Google replacement.
