Chief executive officer Sundar Pichai confirmed Alphabet’s Google gives Apple a 36% share of the revenue earned via advertising from searches in the Safari browser to be the default search engine on Macs, iPhones, and iPads, which amounts to a large part of the $40.4 billion Google allocated for revenue-share payments in 2021 it pays to Apple.
Additionally, the CEO said Google compensates Apple and Samsung with substantial payments to guarantee its search engine is the preselected option on smartphones and that he was not aware what percentage was given to Samsung, despite Epic’s attorney Lauren Moskowitz saying the number was 16%.
The antitrust case was initiated by Fortnite creator Epic Games Inc. over the Google Play store, and yesterday, Pichai tried to counter the allegations of monopoly behaviour by his company by claiming that it competes with app platforms offered by Apple and Samsung.
Google will lose big if Epic is named the champion in this face-off that weakens a revenue stream that generates massive profits by Alphabet’s app marketplace.
According to Epic, the game maker says Google has exploited the Android app supply market for over a decade by making side deals to settle with competitors and uses its “vast resources to snuff out all competition.”
If Epic wins, Alphabet may have to allow more options for app and payment platforms beyond its own store.
But Pichai said it was “apples and oranges” to compare the Apple and Samsung deals because, with Apple as an example, Google is paying to be the default search engine.
“We compete fiercely with Apple,” he said.
Whereas, with Samsung, Google’s payments support the Android ecosystem, which smartphone manufacturers can license for free.
“In the case of Android we are enabling our partners like Samsung,” Pichai said, and that Google pays revenue “share not just to Samsung but to the telecom carriers in some cases when they go to market, which is not the case” with Apple.
A Google executive said that the company paid Samsung $8 billion in four years to make its devices use Google’s search engine, voice assistant and Play Store by default.
All three tech giants, Google, Apple, and Samsung, asked to keep the terms of their revenue share deals classified; nevertheless U.S. District Judge James Donato decided that the information could be disclosed publicly.
