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US lawsuit says Google paid mobile carriers over $1bn to make its search the default option

According to the Justice Department, Google also cut hefty revenue sharing agreements with major mobile carriers to box out competing search engines and browsers.

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Google doled out more than $1 billion last year to U.S. mobile carriers to distribute its search engine, according to the landmark antitrust lawsuit from the Justice Department.
The DOJ suit, filed Tuesday, details several methods Google uses to make its search the default service on browsers, smartphones and other devices. That includes deals with Apple Inc. and Android manufacturers such as Samsung Electronics Co.

Google also cut hefty revenue sharing agreements with major mobile carriers to box out competing search engines and browsers, the Justice Department said. In exchange for placing Google search as the default on phones, carriers received a portion of search advertising revenue.

“If a carrier or manufacturer does not renew its revenue sharing agreement with Google, the distributor loses out on revenue share not only for new mobile devices but also for the phones and tablets previously sold and in the hands of consumers,” the Justice Department said in the suit. “This provision is punitive to the carrier or manufacturer and helps to ensure that carriers and manufacturers will not stray from Google.”

Last year, Google paid major U.S. carriers, collectively, more than $1 billion, the DOJ noted. A 2014 Google document in the lawsuit showed that Google paid $460 million for these deals, which are typically set for two to three years.

The filing did not specify which carriers were involved in these deals, however the largest providers in the U.S. are Verizon Communications Inc., AT&T Inc. and T-Mobile US Inc.

Soon after the suit hit, Kent Walker, Google’s head of global affairs, rejected the complaint’s claims. “Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software,” Walker wrote in a blog post.


Also read: US charges 6 Russian agents for hacking attacks causing ‘unprecedented damage’


 

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