Alphabet CEO Sundar Pichai confirmed on Tuesday that Google pays Apple 36% of Safari search revenue under the terms of a standard search agreement at the heart of the Justice Department’s antitrust claims.
Pichai was testifying in a separate lawsuit brought against Google by Epic Games, the maker of Fortnite. An expert witness testifying on Google’s behalf in the antitrust case in Washington, D.C., revealed the 36% figure in open court on Monday, apparently by accident.
A lawyer for Epic asked Pichai if the figure presented by Google’s witness was correct. “That’s correct,” Pichai replied.
The Epic lawyer then claimed that Google pays Samsung, Android’s largest hardware partner, less than half of what it pays Apple. Pichai replied that while he didn’t know for sure, it was possible.
“It’s like apples and oranges,” Pichai said of the Samsung deal. He added that the deals sometimes pay operators. In later questioning, Pichai said that Google “competes fiercely with Apple”.
Google spent nearly $49 billion on traffic acquisition costs in 2022. Google’s TAC costs include all the payments Google makes to companies like Apple and Samsung to put its search engine in front of users.
The breakdown of Google’s revenue-sharing agreement with Apple was not revealed until Monday, when University of Chicago economics professor Kevin Murphy testified in court. Murphy was testifying on behalf of Google and was responding to questions from Alphabet’s lead lawyer, Williams & Connolly partner John Schmidtlein, when he revealed the figure.
Epic’s lawyer also asked Pichai about the exact dollar amount it was paying Apple, to which Pichai said it was over $10 billion. But the lawyer pushed back, claiming the figure was actually $18 billion.
At the start of Tuesday’s session, lawyers for both Google and Apple asked Judge James Donato to keep the figures under wraps.
“It doesn’t seem to sink in,” Donato told the lawyers. “This is a courtroom in the United States – we do business in bright lights and open doors.” He added: “Just coming in and saying, ‘We’re kind of sensitive about this,’ it’s not going to work.”
News outlets and the US Department of Justice have recently criticised a separate antitrust case involving Google, claiming the company is unnecessarily hiding information about the case from the public.
Alphabet is in the middle of several legal battles. It faces two separate lawsuits from the Department of Justice in Virginia and Washington, D.C., over alleged anti-competitive behaviour. Alphabet is also being sued by Epic Games, which alleges that the company maintains an illegal monopoly with its Google Play store. Epic filed a similar lawsuit against Apple, but lost in a federal appeals court in April.
