Google spends 13 trillion won annually as the price for being the default search engine on iPhone

Testimony of University of Chicago Professor in Google Antitrust Trial
36% Payment of Search Ad Revenue... Worth 13 Trillion Won

There has been a claim that Google has been paying Apple 36% of its search advertising revenue in exchange for being the default search engine on the iPhone.

On the 14th (local time), according to US economic media CNBC and others, Kevin Murphy, a professor at the University of Chicago Booth School of Business, appeared as a witness for Google at the antitrust trial held in Washington, D.C., and made this statement.

The cost Google pays to maintain its dominant position in the search engine market is known to be around $10 billion (approximately 13 trillion KRW) annually. Some argue that this means Google is handing over 15% of Apple's total annual operating profit.

Foreign media reported that when Professor Murphy made this remark, Google's lawyer showed a surprised expression. This is because Google and Apple had kept their search engine partnership details confidential, fearing that disclosing this information would weaken their competitive edge.

Google and Apple have been partners since 2002, with Google serving as the default search engine on Apple Safari. To use another search engine as the default on Apple Safari, users must manually change the browser settings.

From Google's perspective, this contract is very significant since Apple's iPhone is the most widely used smartphone in the United States.

According to global market research firm StatCounter, as of October, the worldwide mobile search engine market share is Google 94.9%, Yandex 1.6%, Baidu 1.2%, Yahoo 0.6%, Microsoft (MS) Bing 0.5%, and DuckDuckGo 0.5%, among others.

Regarding this, Satya Nadella, CEO of MS, pointed out that the contract between Google and Apple has made it virtually impossible for other search engines to compete. He lamented, "People search on Google as routinely as they brush their teeth in the morning. Once such a habit is formed, the only way to change it is to change the default."

Additionally, the market is focused on the potential impact of the antitrust lawsuit on the two companies. If Google stops paying Apple due to the lawsuit, it could deal a significant blow to Apple's revenue.

In that case, Apple might redevelop its own previously abandoned search engine or give priority to competing search engines like Microsoft (MS) Bing.

However, considering appeal procedures and other factors, it is expected to take at least several years before a result is reached.