DMR News

Advancing Digital Conversations

In 2021, Google spent $26 billion to secure default search engine status on browsers and phones.

ByYasmeeta Oon

Nov 1, 2023

In 2021, Google spent $26 billion to secure default search engine status on browsers and phones.

In 2021, Google allocated $26.3 billion to secure its position as the default search engine on mobile devices and web browsers, as revealed during a recent federal antitrust trial against the tech giant.

This sum sheds light on the intricate financial agreements between Google and its various partners, with Apple likely being the primary beneficiary. Previously, analysts estimated that Google might pay Apple as much as $19 billion in the same year for the privilege of being the default search engine on Apple’s devices.

The central point of contention in the antitrust trial, brought by the U.S. Department of Justice and a coalition of state attorneys general, is Google’s alleged monopolistic practices. They argue that Google has maintained its dominant position in the general search market by leveraging its influence to exclude competitors from key distribution channels, particularly Apple’s Safari web browser.

Google’s financial commitment extends beyond Apple and includes popular device manufacturers like LG, Motorola, and Samsung, as well as major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon, along with browser developers like Mozilla, Opera, and UCWeb. These agreements not only secure default status for Google’s general search engine but, in many cases, also prevent these partners from collaborating with Google’s competitors.

In response, Google contends that users have the option to change their default search engine with a simple adjustment in their device settings.

An exhibit presented during the trial, titled “Google Search+ Margins” and primarily focused on Google’s search division, disclosed that the division’s revenue in 2021 exceeded $146 billion. Additionally, the portion dedicated to covering traffic acquisition costs (TAC) surpassed $26 billion. This exhibit also provided data dating back to 2014 when Google’s search division reported revenue of approximately $47 billion and paid around $7.1 billion for default status. These figures indicate substantial growth in Search+ revenue over the seven-year period, along with a nearly fourfold increase in TAC costs.

It’s worth noting that Google’s publicly reported TAC figures also encompass payments made to network partners for displaying ads on their platforms, as indicated in Google’s 10-K filing with the U.S. Securities and Exchange Commission. The segment of TAC addressed in the exhibit pertained specifically to Search+ revenue.

This financial disclosure did not elicit an official response from Google, and there was no immediate comment from Apple in response to CNBC’s request for a statement.

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.