Google pays Apple around $20 billion annually to remain the primary search engine on its platform. According to a recent court decision, this agreement may be deemed invalid.
The court's ruling declared that all payments made by Google to Apple are illegal under antitrust laws. It will be interesting to see how Apple adjusts to this loss, as Google's payments account for about a quarter of its services revenue.
Entering any text into the search bar in Safari yields results directly from Google unless a different search engine is chosen. This minor operation costs Google billions, yet it generates significant advertising revenue. For Google, it's a favorable arrangement, as Apple customers represent a valuable target demographic for advertisers: owning an iPhone suggests a high income level.
For Apple, the payments from Google effectively cost nothing, as no modifications to the operating system are required. A court ruling from 2022 established that Google paid Apple approximately $20 billion to retain its status as the default search engine.
- Apple's services sector generates $78.13 billion, of which Google contributes $20 billion.
As Google pays Apple, other search engines find themselves at a disadvantage in the market. This led the Department of Justice to declare Google's behavior in this area unlawful. It is uncertain, but Google may cease payments to Apple to align its practices with the court's ruling.
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