Buried on Page 36 of the Justice Department lawsuit accusing Google of abusing its monopoly power is this remarkable figure: $8 billion to $12 billion.
That’s the hefty sum Google allegedly paid Apple for one of the most prized pieces of real estate in the world of online search: default status on iPhones and all other Apple devices.
Justice Department investigators say Apple, which does not have its own search engine, hammered out a multiyear deal making Google the default search engine on all iPhones and other Apple products. It meant that Web browser Safari, voice assistant Siri and device query feature Spotlight all made Google the default choice.
“That is the window that the majority of commerce takes place on,” said longtime Apple analyst Gene Munster. “It’s hard to be more coveted than that.”
From Google’s perch, losing default status on Apple devices was a nightmare scenario that Google insiders dubbed “Code Red,” according to the Justice Department’s filing.
The sky-high stakes meant that before the agreement was finalized, Apple CEO Tim Cook and Google Chief Executive Sundar Pichai met in private, in 2018, to discuss how the two Silicon Valley powerhouses could collaborate to “drive search revenue growth.”
Afterward, a senior Apple employee wrote to a counterpart at Google: “Our vision is to work as if we are one company.”
Apple, the most valuable company in the world, derives up to one-fifth of its $260 billion of worldwide income due to its partnership with Google, which commands more than 90% of global online searches, according to the government’s submission to the court.