It is not news that Apple and Google have had, for at least a decade, an agreement in which the Mountain View company pays a huge amount every year to ensure that Google Search remains the default search engine for Safari browser, on iPhone, iPad and Mac.
- Google paid Apple $1 billion in 2014 to be the default iOS search engine EU antitrust laws will affect Apple, Google, Facebook and more
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Both companies never confirmed the agreement or commented on values, and the only existing evidence is a mention in 2016, in the lawsuit filed by Oracle against Google, of that the search giant had paid the apple $1 billion two years earlier, when it again threatened to open up competition from the default option to other engines.
In principle, no maintenance of the deal would hurt Apple more than Google, with the former failing to make cash with a guaranteed cash every year, while Google Search, also present as standard on Android and being the most used engine on Windows and Linux computers, would lose an income of approximately US$ 350 million, which for her, was nothing.
However, the evolution of mobile devices ended up favoring Apple much more. Consumers who use the PC to browse, read emails, watch videos, read articles and books, etc., began to switch from their desktops and laptops to smartphones and tablets, and a large portion of them, considering the global scenario, preferred iPhones and iPads. . And this had an unpleasant effect on Google.
In 2012, Apple devices already accounted for 30% of Google’s revenue from ads, which everyone knows, account for plus 90% of the company’s gross revenue. In 2017, this percentage had already jumped to 50%, and in 2021… Today, 68% of all clicks on Google ads are made on mobile phones, and iGadgets represent 71% of that amount.
Putting it in simple terms: Google depends
Second, the value of the settlement is violently readjusted year by year. Google reportedly paid $9 billion in 2018 and $12 billion in 2019; the last payment, in 2021, would have reached US$ 15 billion, and it is estimated that the one in 2022 will reach the absurd figure of US$ 20 billion.
And Mountain View pays even so, because he understands that he needs to spend money to profit much more.
The big problem is that the agreement between Google and Apple, in which, in a way, the former pays for different treatment on the latter’s platform, is one of the many anti-competitive practices that regulators have been fighting in recent years, against both companies mentioned, and others such as Amazon, Facebook, Microsoft and etc.
A new lawsuit recently filed against Apple, Google and their respective CEOs, Tim Cook and sundar Pichai, accuses the group of violating US antitrust laws, both in the part of the agreement that prevents apple from competing directly in the search engine market, and in measures taken by apple to curb the reach of competitors, such as Microsoft Bing, Yahoo! Search and DuckDuckGo, among others, in order to prominently promote and prioritize the paying customer, Google Search, including leading to acquisitions of smaller players by any of the companies.
O The process requires a series of measures, some unlikely to happen in the US (at least, not for now), such as the splitting of Google and Apple into smaller companies, in order to separate their different businesses, and more interestingly, to play for the crowd the annual agreement and reveal how much the search giant pays Cupertino per year, and how many times this has happened.
The fact is that even though it is not officially recognized, authorities know that the agreement exists. In 2020, UK regulatory authorities
started investigating ways to deal with the partnership in the strictness of local antitrust laws, and as far as is known, the European Commission is also investigating the case, among the many processes that already hammers in the minds of both tech giants.
As usual, Apple and Google did not comment on the process.
Source: PR Newswire, MacRumors
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