Google’s Secret $224B Safari Deal Exposed: How Apple Profits, US

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Google’s Secret $224B Safari Deal Revealed as Apple Profits

During the ongoing Department of Justice (DOJ) monopoly trial examining Google’s search business, a key detail about Google’s default search deal with Apple came to light. It was disclosed that Google pays a significant portion of its search advertising revenue from Safari to keep its search engine as the default in Apple’s browser. According to Bloomberg, the percentage Google pays is 36%.

This revelation came as a surprise, as both Google and Apple had requested that this information be kept confidential. However, during testimony, Google’s main economics expert, Kevin Murphy, inadvertently disclosed the details of the deal. The disclosure confirmed the value of default placements on iPhones to Google, highlighting the DOJ’s argument that Google pays large sums for default search deals to maintain a monopoly and block out competitors.

Although the exact amount of revenue sharing between Google and Apple remains unknown, estimates suggest that Apple could be earning tens of billions of dollars from the deal. Industry sources previously claimed that Google paid Apple approximately $18 billion for the deal in 2021. However, the ongoing trial has shed more light on Google’s expenditures, revealing that the company paid a total of $26 billion for default contracts.

These default deals have been crucial for Google’s search advertising revenue, which is rapidly climbing. It is projected that Google’s global ad revenue will reach almost $340 billion by 2027, with search engine traffic accounting for a significant portion of this revenue.

This issue has become the center of the DOJ’s case against Google, as the agency argues that such default deals help Google maintain an illegal monopoly in the search industry. If the DOJ’s claims are proven, Google may be ordered to break up its search business, impacting not only Google but also its partners, such as Apple.

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Google CEO Sundar Pichai recently testified that default deals can be valuable when done correctly and claimed that they result from the superiority of Google’s search engine. However, the disclosed details of the Google-Apple deal challenge this narrative.

As the trial proceeds, Google continues to profit from these deals. From 2022 to 2023, Google’s ad revenue increased by $5 billion, largely attributed to AI-driven innovations across Google products, including search.

Judge Amit Mehta, presiding over the antitrust trial, considers the Google-Apple default deal the heart of the DOJ’s case against Google. With each new detail that emerges, the DOJ aims to convince Mehta that the deal grants Google an unfair advantage over its competitors.

The trial is expected to continue for another week, with Mehta not anticipated to issue a ruling until 2024. As the proceedings unfold, the significance of default search deals and their impact on competition in the search industry will likely remain a central topic of discussion.

Frequently Asked Questions (FAQs) Related to the Above News

What is the DOJ monopoly trial examining Google's search business?

The DOJ monopoly trial refers to an ongoing legal case in which the Department of Justice is investigating Google's alleged antitrust violations related to its dominance in the search industry.

What was revealed about Google's deal with Apple during the trial?

It was disclosed that Google pays a significant portion of its search advertising revenue from Safari to maintain its search engine as the default in Apple's browser. The percentage Google pays is reported to be 36%.

Why was the disclosure about the Google-Apple deal a surprise?

Both Google and Apple had requested that the information about their deal be kept confidential. However, during testimony, Google's economics expert inadvertently provided details about the agreement, leading to its revelation.

How much revenue does Apple potentially earn from the Google default search deal?

The exact amount remains unknown, but estimates suggest that Apple could be earning tens of billions of dollars from the deal. Industry sources previously claimed that Google paid Apple around $18 billion for the agreement in 2021 and a total of $26 billion for default contracts.

Why are these default deals important for Google's search advertising revenue?

The default deals ensure that Google's search engine is set as the default option in Apple's Safari browser. This increases the likelihood of users conducting searches on Google, leading to more ad impressions and revenue for the company.

What is the DOJ's argument against these default search deals?

The DOJ argues that these default deals help Google maintain an illegal monopoly in the search industry by blocking out competitors. If proven, this could result in orders for Google to break up its search business.

What impact could the trial's outcome have on Google and its partners, such as Apple?

If the DOJ's claims are upheld and the court orders Google to break up its search business, it would likely have significant implications not only for Google but also for its partners like Apple. The exact impact would depend on the specifics of the court's ruling.

What has Google's CEO, Sundar Pichai, stated about default deals?

Pichai stated that default deals can be valuable when done correctly and that they result from the superiority of Google's search engine. However, the disclosed details of the Google-Apple deal challenge this narrative.

What is Judge Amit Mehta's role in the trial, and why is the Google-Apple default deal important in the case?

Judge Amit Mehta is presiding over the antitrust trial. The Google-Apple default deal is considered the heart of the DOJ's case against Google. Each new detail that emerges aims to convince Judge Mehta that the agreement grants Google an unfair advantage over its competitors.

When is the trial expected to conclude, and when will the ruling be issued?

The trial is expected to continue for another week, but Judge Mehta is not anticipated to issue a ruling until 2024. The proceedings are likely to involve ongoing discussions about the significance of default search deals and their impact on competition in the search industry.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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