Unexpected leak! Google "bleeds" as Apple deducts 36% to remain Safari's default search engine.
Samsung may have received less than half the amount of money that Apple did.
The latest court trial unexpectedly revealed the "secret agreement" between the American tech giant and Alphabet-C, as Alphabet-C is willing to pay a sky-high fee to maintain its position as the default search engine on Apple devices.
On Monday local time, Kevin Murphy, an economic expert hired by Alphabet-C and a professor at the University of Chicago, inadvertently disclosed the specific numbers of the revenue-sharing agreement between Alphabet-C and Apple during the antitrust trial at the Department of Justice in Washington.
According to Murphy, in order to maintain its position as the default search engine on Safari, Alphabet-C needs to pay Apple 36% of the search revenue it generates from Safari.
The details of the search engine agreement between the two giants have been kept confidential for a long time. When Murphy accidentally let slip, Alphabet-C's main litigation lawyer "clearly frowned," according to the media.
On Tuesday, during the subsequent trial, Alphabet-C CEO Sundar Pichai confirmed that the number disclosed by Murphy was indeed true.
Epic, the prosecution's lawyer, also asked Pichai about the exact amount paid to Apple, to which Pichai replied, "over 10 billion US dollars," but the lawyer countered that the actual number was 18 billion US dollars.
The Epic lawyer also pointed out that the amount Alphabet-C pays to its largest hardware partner, Samsung Electronics, is less than half of what it pays to Apple. Pichai responded by saying that although he was not certain, such a situation is possible.
In 2022, Alphabet-C spent nearly 49 billion US dollars on traffic acquisition costs. This includes all the fees Alphabet-C paid to companies such as Apple and Samsung Electronics to maintain its position as the default search engine.
The US Department of Justice believes that this agreement is evidence of Alphabet-C illegally maintaining its dominant position in the search engine and search advertising market.
Currently, Alphabet-C's parent company, Alphabet-C-C, is embroiled in multiple lawsuits. Alphabet-C is facing lawsuits from the Department of Justice in Virginia and Washington, D.C., respectively, for alleged anti-competitive practices. At the same time, game company Epic Games accuses Alphabet-C-C of maintaining an illegal monopoly through its Google Play Store. Epic had filed a similar lawsuit against Apple, but lost in federal appeals court in April this year.