Apple and Google have a long-standing monetary agreement to make Google the default search engine on iOS devices. Although the exact amount of this deal has never been officially announced, reports say it will be announced in 2021. 10 billion dollars It shows that it is around. But the latest analysis from financial consultant Bernstein shows that Google’s payment to Apple is currently $18 billion to $20 billion shows that it varies between .
The announcement came as part of an investor note assessing the potential impact on Apple of the U.S. government’s ongoing antitrust lawsuit against Google. The Department of Justice is investigating Google’s Information Services Agreement (ISA) with Apple as evidence of a potential search engine monopoly.
According to Bernstein’s report, the ISA deal is worth $18 billion to $20 billion in annual payments from Google to Apple and accounts for 14-16 percent of Apple’s annual operating profit. The estimate is based on Google paying 22 percent of total ad revenue as part of traffic acquisition costs (TAC) and Apple receiving about 40 percent of that amount.
Although the Department of Justice stated during the lawsuit that it believed Apple received approximately $10 billion from Google and the ISA, this information was obtained externally.
The report notes that although Google, not Apple, is on trial, there is a possibility that Apple will present a choice screen if Google loses the case. Apple controls access to its user base, which generates over $60 billion in advertising revenue, so it may continue to receive a commission (about 25-30 percent) for accessing these search ad revenues.
Offering a selection screen could also provide Apple with an opportunity to launch its own search engine as an option, something that is difficult to do without regulatory scrutiny in the current environment.
It’s important to keep in mind that a decision in this antitrust case is not expected until next year and could go through a lengthy appeal process, further extending the timeline and uncertainty surrounding the future of this financial settlement.