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The ongoing US v. Google antitrust trial has spotlighted the tech giant's enormous expenditure to secure its position as the default search engine across various platforms.
In 2021, Google invested a staggering $26.3 billion to ensure its dominance as the default search engine on multiple browsers, phones, and platforms. The power of defaults, the preference that appears when a device is first activated, has been a major point of contention in the antitrust trial.
The exact amount Google spent on its search distribution deals was revealed during the Justice Department's cross-examination of Google's search head, Prabhakar Raghavan.
To put this expenditure into perspective, Alphabet, Google's parent company, reported that the Google Search ad business generated about 44 billion in the last quarter and approximately 44 billion in the last quarter and approximately 165 billion in the past year.
Google's entire ad business, including YouTube ads, made slightly less than $90 billion in profit. Essentially, Google relinquished about 16 percent of its search revenue and 29 percent of its profit to secure these distribution deals.
A significant portion of Google's spending goes to Apple. It was reported that Google paid around $18 billion in 2021 to be the default search engine in Safari across Google products.
>>> How Apple Search Ads Contribute to Visibility?
Google also pays Mozilla for default placement in Firefox, Samsung for the same privilege on its devices, and has deals with numerous device manufacturers, wireless carriers, and other platforms.
Previously, the specifics of these deals were undisclosed, leading to speculation about their value to Google. As Google begins its defense in the trial, Raghavan testified about the company's constant risk of losing relevance and users to platforms like TikTok and ChatGPT.
He also identified Yelp and Amazon as competitors. The Justice Department argues that Google's enormous expenditure to secure default status is a tactic to stifle competition.
The outcome of the trial will be determined by Judge Amit Mehta after several more weeks of testimonies.
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