Google is currently paying between $8 – $12 billion per year to Apple to remain the default search engine on iOS devices. This has been revealed in a new report by The New York Times, which says that the deal is worth billions to both Apple and Google.
Google pays almost $12 billion per year to Apple for default search engine spot in iOS
Although Google and Apple are fierce competitors when it comes to Android and iOS, both have a mutually beneficial deal which allows Google to earn billions in revenue from over a billion iOS devices in active use. The deal was first signed 15 years ago, and was worth much less back then. However, with time, both Google search and the number of iPhones and iPads in active use have grown considerably. As Google dominates web search with more than 90% global market share, it is now under scrutiny and faces an antitrust lawsuit in the United States.
Apple’s general counsel from 2009 to 2017, Bruce Sewell, told The New York Times:
“We have this sort of strange term in Silicon Valley: co-opetition. You have brutal competition, but at the same time, you have necessary cooperation.”
As per the United States Justice Department, half of Google’s search traffic comes from Apple hardware. Despite the partnership, Apple continues to build-in privacy measures that aims to reduce data harvesting by companies like Google and Facebook. But despite Apple’s public focus on privacy, CEO Tim Cook has stated that they keep Google search as default because it is the best search engine. We do not often hear such endorsements of other companies and their products from Cook.
Tim Cook and Sundar Pichai, CEOs of Apple and Google, respectively, met back in 2018 to see how revenue from Google search could be increased fo r both companies. The increased number of search results in iOS 14 that lead users to Google in Safari are indicative of such discussions.
Other reports suggest that Apple has also been working on an alternative to Google search internally. Many Google employees believe that if there is any company that can create a good alternative to Google’s search engine, it would be Apple. In any unlikely scenario, if Google loses its default search engine status on Apple devices, it might open up the market for competitors which include Bing and DuckDuckGo. This is something that the United States Justice Department will be pointing out in its antitrust lawsuit, the biggest tech one since Microsoft’s antitrust case back in the 90s.