In the ongoing high-stakes trial in the United States where Google is defending itself against monopoly claims, a new revelation has emerged regarding the extent to which Google is willing to pay to secure its position as the go-to search engine.

An expert witness testifying on behalf of Google disclosed that the tech giant channels 36% of the advertising revenue generated from Apple’s Safari web browser back to Apple.

This disclosure has brought to light a crucial aspect of the relationship between these two industry behemoths, a relationship that lies at the core of the monopoly case under examination.

Prosecutors in the case argue that the dealings between Google and Apple have resulted in the illegal restriction of competition, raising concerns about fair market practices.

The revelation of the specific share of ad revenue sent to Apple reportedly led to a visible reaction from Google’s lead lawyer, indicating the significance and sensitivity of this information in the context of the trial.

Google has consistently asserted that its dominance in the realm of online searches is a direct result of offering a superior product. However, the trial, which began in September, has brought to light various aspects of Google’s business practices that are now being scrutinized in the pursuit of establishing whether the company engages in anti-competitive behavior.

A key element of this trial is the financial transactions between Google and other companies. According to statements heard during the proceedings, Google has paid a staggering sum exceeding $26 billion to various companies, including Apple, Samsung, and Mozilla, to secure its position as the default search engine.

Analysts on Wall Street have estimated that more than $18 billion of this amount was directed to Apple alone.

 

Professor Kevin Murphy from the University of Chicago, who testified during the trial, emphasized that the substantial sums paid by Google and its parent company Alphabet are indicative of the intense competition prevalent in the market.

This argument aligns with Google’s defense, suggesting that these financial transactions are a response to the competitive landscape rather than evidence of anti-competitive behavior.

As the trial progresses, it has featured a parade of witnesses, including notable figures such as Alphabet chief Sundar Pichai and Microsoft boss Satya Nadella.

Prosecutors from the US Department of Justice are seeking significant penalties, including an end to what they perceive as anti-competitive practices.

The outcome of this trial is closely watched, as a ruling against Google could have far-reaching implications for the entire tech industry, potentially influencing regulatory approaches to dominant players.

Even if the verdict stops short of recommending a breakup of the company, it may lead to changes in business practices and regulations. Judge Amit Mehta, overseeing the proceedings, is not expected to deliver a ruling until early next year, prolonging the anticipation and impact of this landmark case.

 

 

Last Updated: 15 November 2023