Revealed: Google Pays $7 Billion To Get Their Apps Pre-Installed on Android Smartphones
Every time you buy a new Android smartphone, do you ever think of the pre-installed apps that come with it? While looking at the pre-installed applications, on most occasions we dismiss the Google apps considering them a ‘default’ because Google makes Android OS which powers Android smartphones, right? Wrong!
It has recently come to light that Google has been shelling out as much as $7 Billion to manufacturers to ensure that they make use of their set of apps as pre-installed apps on Android smartphones. This payment covers pre-installed apps, as well as placement of the search bar, etc.
Google also pays to ensure they are the default search option in Safari browser. Moreover, it also pays for Gmail, YouTube and Chrome to be the default e-mail, video and browsing apps on Android smartphones. All these costs are together known as ‘Traffic Acquisition Cost’.
While the number is high, what is even more stunning piece of information is that these numbers are on the rise. Google now pays almost three times what it used to pay back in 2012. These numbers are only going to increase in the years to follow. A new deal between Google-parent Alphabet and Apple has Alphabet paying somewhere between $3 Billion to $4 Billion to Apple on a yearly basis.
All in all Google spent $19 Billion in acquiring traffic last year. This includes Google-powered ads, the aforementioned deals with Androisd smartphones, as well as browser integrations such as the one with Safari. However, these deals are also landing Google in trouble. Recently Google has been sued by a number of state bodies over violating anti-trust laws as well as for anti-competitive practices.
Authorities are investigating if Google is abusing its power and promoting their service in a manner which does not allow a fair competition in the markets, it might spell trouble for the search giant. A similar case in Europe had Google shell out €2.42 billion as fine.
Source: Android Authority