It’s a bit of an open secret that Google pays Apple a considerable amount of money to secure Google’s position as the default search engine on Apple devices. But now, we may have a better idea of how much the search giant pays the iPhone maker.
In a new investor note by financial advisor Bernstein’s Toni Sacconaghi (shared by Ped30), the analyst claims Google’s payment to Apple to maintain the status quo could reach $15 billion in 2021, up from $10 billion last year.
Sacconaghi’s note estimates that Google’s payments to Apple could continue increasing on-year and approach $18-20 billion in 2022. The analyst bases the figures on Apple’s public filings as well as a bottom-up analysis of Google’s traffic acquisition costs.
The deal between Apple and Google has been in place for more than a decade, but it could be considered a regulatory risk, due to Google’s search engine dominance coming under increasing scrutiny in recent years.
Microsoft and Yahoo have in the past shown interest in inking a default search engine deal, but analysts believe that Google pays enough to Apple to make sure another search engine outbids.
The U.S. Justice Department last year filed an antitrust lawsuit against Google, saying the search giant has used anticompetitive and exclusionary practices in the search and advertising markets to maintain an unlawful monopoly. The deal for Google to be Apple’s default search engine on Apple’s Safari browser is expected to be a focus of that lawsuit.
