Google and Apple have been competing for a long time, but recently a report said that the search giant has agreed to spend a lot of money for Apple to become the default search engine on iPhones.
According to The Register, Google paid Apple between 18 and 20 billion USD just to continue to be the default search engine on the iPhone. This information is given in the context that the Information Services Agreement between Apple and Google is being investigated by the US Department of Justice.
Apple has provided little information about the sub-segments within its Services division, but Google still reports the amount it sends to Apple in terms of traffic acquisition cost (TAC) for its segment partners. coordinate. The deal with the search giant accounts for 14 to 16% of Apple’s annual operating profit. Google’s financial report said it paid 22% of total advertising revenue for traffic acquisition costs. Apple is the unit that receives 40% of this 22% figure, equivalent to 8.8% of Google’s total advertising revenue
One of the main areas of concern in the lawsuit that began last month is the Information Services Agreement (ISA) between Apple and Google. During the trial, the agreement was considered one of the main examples of anti-competitive behavior.
The report also mentioned the possibility that the federal court will rule against Google and if it happens, the agreement with Apple will also be terminated. This could lead to situations similar to the partnership between Samsung and Mozilla.
The verdict in Google’s antitrust case is not expected until 2024, followed by an appeal process that could prolong the proceedings. However, experts say the economic impact on Apple is minimal.
The report suggests that Google is in the testing process, while Apple could theoretically partner with another unit to be the default search engine, or could maintain an agreement with Google outside the US. A more likely scenario is that Apple provides a selection screen. Apple controls access to its installed base, which generates nearly $60 billion in advertising revenue, so the report estimates Apple will continue to receive commissions in the 25 – 30% range to provide access to search ads
