WSJ: Google Deal With Apple Worth $13 Billion A Year

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WSJ: Google Deal With Apple Worth $13 Billion A Year

The Wall Street Journal is reporting that Google may be paying Apple as much as $13 billion per year to be the default search engine for the Safari web browser which is included on all Apple devices. That’s up from $1 billion that Google paid Apple in 2014 which was disclosed in a court filing during a legal battle with Oracle. If the $14 billion is accurate it amounts to approximately 25% of Apple’s total services revenue.

The DOJ is currently meeting with state attorney generals in anticipation of filing an antitrust case against Google which is official owned by Alphabet, Inc. The New York Times says that a primary focus of a lawsuit by the Justice Department are the default search deals that Google has with Apple and other companies. These agreements make it virtually impossible for competitors to ever make a dent into Google’s 92.1% US search engine market share.

Google has repeatedly said that the simple reason it is popular is that it works hard to deliver the best search results. The WSJ article notes that even if Google was precluded from default search deals many people would still choose to use Google for search, validating Google’s argument.

A recent post by Google advanced that point:

Products like Search, Gmail and Maps help Americans every day. Survey research found that these services provide thousands of dollars a year in value to the average American. We provide these tools to everyone for free.

Our products increase choice and expand competition. They level the playing field for small businesses everywhere—enabling them to sell their products, find customers, reduce their costs and, in difficult times, get back on their feet.

Source: Google Blog

Google says that its free products help people and small businesses across America. They make the case that their technologies help America maintain its competitive edge. In other words, Google doesn’t charge for its search engine and is providing a service loved by millions, so it’s not anti-competitive simply because people choose it instead of competitors.

WSJ: Google Deal With Apple Worth $13 Billion A Year
Rich Ord

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