The chief executive of Google's owner has confirmed the search giant makes over US$10 billion in annual payments to Apple Inc (NASDAQ:AAPL) to secure its place as a preferred search engine.
Sundar Pichai, CEO of Alphabet Inc (NASDAQ:GOOG), confirmed in court that Google pays Apple more than a third of the revenues it earns from searches on Apple's web browser Safari under the terms of a default search agreement, according to reports.
Google pays Apple 36% of its Safari search revenue, Pichai said this week during a hearing for a legal case brought by Fortnite maker Epic Games.
The US Justice Department is separately pursuing Google as part of an antitrust suit that is examining the relevance of these payments to market competition.
In a testimony during antitrust proceedings on Monday, an expert witness for Google revealed the payments, apparently by accident.
Pichai then confirmed the size of Google's payments to Apple during his testimony on Tuesday in the lawsuit filed by Epic Games.
The attorney for Epic Games suggested that Google’s payments to Apple could amount to as much as US$18 billion yearly.
Pichai admitted that it was possible Google paid Android’s biggest hardware partner Samsung far less, as little as half the amount it gives to its biggest rival Apple, to secure its dominance as a search engine provider.
Pichai later said that Google competes “fiercely with Apple”, and that the two arrangements with Apple and Samsung were like “apples and oranges”.
Google’s agreements with these companies are arranged as ‘revenue-sharing’ incentives where a portion of the sales from clicks are shared between the companies, according to earlier testimony.
Alphabet is facing two lawsuits from the Justice Department related to market competition, in addition to the case brought by Epic Games, which alleges the Google Play store has an illegal monopoly.
Epic Games lost a similar case against Apple in a federal appeal hearing this spring.