Alphabet CEO Admits That Google Pays Apple 36% of Safari Search Revenue

Alphabet CEO Sundar Pichai has recently acknowledged that Google pays Apple a substantial 36% of its Safari search revenue. This default search agreement lies at the heart of the Justice Department’s ongoing antitrust allegations against Google.

Google had not publicly disclosed its revenue-sharing agreement with Apple until Monday, when Kevin Murphy, an economics professor from the University of Chicago, inadvertently revealed it in court, according to CNBC. Murphy was testifying on Google’s behalf and answering questions from Alphabet’s lead attorney during the antitrust proceedings in Washington, D.C., when he shared the information.

Alphabet is currently facing multiple legal battles, including two suits from the Justice Department in Virginia and Washington, D.C., regarding the company’s “allegedly anticompetitive behavior.” Fortnite creator Epic Games is also suing Alphabet, alleging that “the company maintained an illegal monopoly with its Google Play store. Epic filed a similar suit against Apple but lost in federal appeals court in April.”

Pichai’s confirmation came during his testimony in a distinctive lawsuit lodged by Epic Games against the tech giant. During the trial, Pichai was quizzed by an attorney representing Epic Games about the accuracy of the disclosed payment rate. In response, the Alphabet CEO confirmed it was true.

Further allegations were made by Epic’s attorney, asserting that Google’s payment to Samsung, the top Android hardware ally, is less than half of what it shells out to Apple. While Pichai didn’t confirm the specifics, he conceded that it’s a plausible scenario.

Google has been known to pay extravagantly to secure its status as the default search engine on various browsers like Safari and Firefox. This hefty privilege cost Google a whopping $26.3 billion in 2021, with a significant slice, $18 billion, being paid to Apple. However, the intricate breakdown of this astronomical sum has been kept under wraps until now.

Addressing similar issues in September, Apple’s Eddy Cue defended the deal between the two tech giants. He disclosed that Apple had initially expected a larger share of the revenue that Google garners from Safari traffic. Still, they eventually settled on the lower figure that Murphy brought to light. Although exact numbers were deliberated upon that day, the specifics were discussed behind closed doors, away from prying media ears.

In 2019, the U.S. Justice Department launched an investigation into Google’s alleged search monopoly, backed by 50 U.S. attorneys general. The charges filed post-investigation claimed that Google was utilizing anticompetitive tactics to maintain its dominance. The trial commenced on Sept. 12, shedding light on the complex interplay of power, money, and influence among tech powerhouses like Google and Apple.