This is Google’s largest recurring payment, accounting for 14 to 21% of Apple’s annual profits.
On Tuesday, the US Department of Justice filed an antitrust lawsuit against Google, alleging that the Mountain View company used anti-competitive and restrictive methods in search and advertising markets to maintain an illegal monopoly.
In 2017, Apple updated its agreement to keep Google Search as the default search engine on Apple devices. The New York Times reports that Apple receives between $ 8 billion and $ 12 billion a year in exchange for Google being the default search engine on the company’s devices. The source adds that this is Google’s largest recurring payment, accounting for 14 to 21% of Apple’s annual profits.
Prosecutors say this is an illegal tactic used to defend Google’s monopoly and suppress competition. Almost half of Google’s search traffic now comes from Apple devices, according to the Justice Department, and the prospect of losing the deal has been described internally as “dire.”
Apple has also been criticized for encouraging anti-competitive behavior by agreeing to a deal and extracting additional money through regular reviews. The Justice Department complaint cited a 2018 senior Apple official as saying that “our vision is that we operate as if we are one company.”
The New York Times believes that the possible break of this agreement could push Apple to acquire or create its own search engine, which will pose a greater threat to Google.