The Justice Department claims that Google used substantial payments to ensure its search engine was the default on web browsers and mobile phones. A top company executive testified on Friday that the tech giant paid $26.3 billion to other companies in 2021 to secure its position. The amount of payments has more than tripled since 2014, according to senior executive Prabhakar Raghavan, who is responsible for search and advertising. These payments to secure the default status are now Google’s most significant cost, exceeding revenue from search advertising, which reached $146.4 billion in 2021.
According to a slide presented in court on Friday, the division’s revenue more than tripled during this time frame while traffic acquisition costs nearly quadrupled. The slide reportedly included numbers dating back to 2014, when Search+ revenue was booked at about $47 billion, and the portion of traffic acquisition costs was around $7 billion.
Google initially resisted disclosing the specific figures, arguing that doing so could harm future contract negotiations. But Judge Amit Mehta, who presides over the antitrust trial, ruled that the details should be made public.
As the case continues, it will be interesting to observe the impact of this disclosure on the more extensive discussion about market competition and the influence of tech giants. The Justice Department’s case against Google centers on the claim that the company has illegally maintained its monopoly power in general search by using its dominant position to block competitors from important distribution channels like smartphone makers, wireless carriers, and web browser developers.
Alphabet Inc. operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides search, maps, apps, Gmail, YouTube, Android, Chrome, hardware, and other products and services. The Google Cloud segment offers data storage and computing services. The Other Bets segment includes Fitbit wearable devices, Google Nest home products, Pixel phones, and other gadgets. The company’s products and services are offered in the United States, Europe, the Middle East, Africa, Asia-Pacific, and Latin America.
