Jakarta, CNBC Indonesia – Google paid US$ 26.3 billion (Rp. 418.7 trillion) to Apple, Samsung and several other companies throughout 2021 to make Google Search immediately available as default software on new iPhones.
According to CNBC International, The disbursement of funds from Google to cellphone manufacturers such as Apple, Samsung and Motorola as well as to cellular operators in the US such as AT&T and T-Mobile was revealed in a trial regarding Google’s monopolistic practices.
Prosecutors at the trial stated that the payments from Google were evidence of Google’s efforts to maintain a monopoly in the web search engine business. The aim is to block competitor search engines from “key distribution channels”, one of which is Apple’s browser called Safari.
The majority of the US$ 26.3 billion payment went to Apple. Previously, Apple was estimated to receive US$ 19 billion (Rp. 302 trillion) by 2023 so that Google Search would remain the default search engine on all Apple devices, including iPhones and Macbooks.
“Google pays billions of dollars each year to distributors, including top device manufacturers like Apple, LG, Motorola, and Samsung; major mobile carriers like AT&T, T-Mobile, and Veriozon; and browser developers like Mozilla, Opera, and UCWeb to secure status “Google Search as the default search engine. In certain cases, this includes prohibiting partners from working with Google competitors,” wrote the US Department of Justice lawsuit.
Google argues default status is meaningless because users can still change the search engine in their browser with just a few clicks.
These payment costs are recorded by Google in financial reports as “traffic acquisition costs” or TAC. In 2021, Google recorded revenue of US$ 146 billion (Rp. 2,324 trillion) from the search engine business with a TAC of US$ 26.3 billion.
In 2014, Google’s revenue from the search engine business was US$ 47 billion (Rp. 748 trillion) with a TAC of US$ 7.1 billion. (Rp. 113 trillion). This means that in 7 years, the fees paid by Google to maintain Google Search as the default search engine have quadrupled.
A Google spokesperson declined to comment CNBC International. An Apple spokesperson did not respond to a request for comment.
[Gambas:Video CNBC]
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