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Google’s hefty price for default search engine status

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Vice President Prabhakar Raghavan testified on Friday that in 2021, Google disbursed $26.3 billion to maintain its position as the default search engine and secure traffic, as reported by Bloomberg. It is highly probable that the major portion of this substantial sum was directed towards Apple, with which Google has maintained a longstanding arrangement, ensuring Google’s status as the default search choice on iPhones, iPads, and Mac devices.

As part of the ongoing antitrust suit brought forth by the Department of Justice (DOJ), Raghavan disclosed that Google’s search advertising yielded a staggering $146.4 billion in revenue during 2021, providing context to the $26 billion allocated for securing default status. Raghavan clarified that obtaining default status constituted the most substantial portion of their traffic acquisition expenses.

Although Raghavan did not specify the exact amount directed to Apple, CNBC reported an estimation from private wealth management firm Bernstein, suggesting that Google might disburse up to $19 billion to Apple in the current year for retaining default privileges.

A presentation slide unveiled in court illustrated that in 2014, Google generated $47 billion in search revenue while disbursing $7.1 billion for default status. Raghavan’s testimony highlighted a significant growth trend, with Google’s overall payments for default search engine privileges nearly quadrupling from 2014 to 2021, while its search advertising revenue experienced roughly a threefold increase.

Google opposed the public disclosure of these figures, contending that it could potentially hinder their future contract negotiations. However, Judge Amit Mehta, presiding over the case, disagreed with Google’s argument.

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