Google is the default search engine for the iPhone and iPad, and the search giant is paying good money for that privilege.
According to a report from the New York Times, Google is paying Apple up to $12 billion per year to be the chosen search engine for the platform.
The U.S. Department of Justice is investigating Google, claiming the company has an unlawful monopoly in the search and advertising markets.
Last week, the Justice Department filed an antitrust lawsuit, detailing some of Google’s agreements and business practices that the DOJ claims are illegal.
One such deal is the agreement between Google and Apple. In 2017, Apple and Google signed an agreement to keep Google as the default search engine for iOS. These searches include those from Siri and those initiated from within the built-in Safari web browser.
Apple reportedly receives between $8 and $12 billion from Google each year for this coveted position.
This multi-billion deal is the single largest payment Google makes to another company and contributes between 14 and 21 percent of Apple’s annual profits.
It’s equally significant for Google, accounting for almost half of Google’s search traffic and helping secure Google’s position as the search market leader.
Some analysts say a loss of this agreement is “terrifying” to executives and would produce a “code red” situation in the company.
The Department of Justice has a different opinion and describes this agreement as “an unlikely union of rivals.”
If the Justice Department moves to sever this tie, both Google and Apple stand to lose handsomely. Google would be hard-pressed to replace the search traffic and ad revenue it earns from roughly one billion iOS users.