Google is shelling out what court testimony describes as an “enormous sum of money” every month to Samsung Electronics to ensure its Gemini generative AI app comes preinstalled on Samsung phones and devices, according to revelations in an ongoing antitrust case.
Peter Fitzgerald, Google’s vice president of platforms and device partnerships, testified this week in Washington federal court that the company began these payments to Samsung in January as part of the Justice Department’s antitrust case against the tech giant.
The contract extends for at least two years, providing Samsung with fixed monthly payments for each device that preinstalls Gemini, plus a percentage of advertising revenue generated within the app.
“We took into consideration what was being offered by competitors,” Fitzgerald acknowledged during Tuesday’s testimony, revealing that Samsung had received “competitive offers” from rival AI companies, including Microsoft, Meta, and OpenAI to feature their AI applications instead.
Google’s AI Default Deals Under Antitrust Scrutiny
This payment arrangement comes at a particularly sensitive time for Google, as Judge Amit Mehta had already ruled last year that Google’s practice of paying Samsung to be the default search engine on its devices violated antitrust law. The current proceedings are focused on determining what remedies should be imposed on Google for this illegal behavior.
The Justice Department has proposed prohibiting Google from paying partners for search engine default status – a ban that would extend to AI products like Gemini, which prosecutors argue benefited from Google’s illegal search monopoly.
During cross-examination, Fitzgerald attempted to highlight flexibility in the arrangement, stating that the agreement allows Samsung to include alternative generative AI services if desired.
He also noted that as of this month, Google had amended its search agreement with Samsung to eliminate requirements that Samsung exclusively pre-install Google’s search engine and personal assistant.
While the exact payment amount remains undisclosed in court, DOJ lawyer David Dahlquist described it as an “enormous sum of money in a fixed monthly payment” during opening statements. For context, previous testimony in a separate case revealed that Google paid Samsung $8 billion between 2020 and 2023 to make Google Search, the Play Store, and Google Assistant the defaults on Samsung mobile devices.
Google’s Payment Policies Under Scrutiny: Implications for Tech and AI
This is not the first time that Google’s payment policies got the company into court. In an earlier case regarding monopolizing the Android market, in 2023, a federal jury found Google liable for having used its monopoly power in the Android app market through policies that it instituted via Google Play.
After that ruling, a federal court in California ordered Google to reduce restrictions that are preventing developers from creating competing marketplaces and charging systems – something Google is currently appealing.
This case points to the fierce competition in the fast-growing AI market, with leading technology firms paying handsome amounts to be prominently displayed on popular devices. For Samsung, as one of the world’s largest smartphone makers, such partnerships are enormous revenue streams aside from hardware sales.
Industry observers comment that the payments represent the value of default positioning in the technology world. Apps pre-installed on devices generate much higher usage levels than apps users have to download and install themselves, and that confers a big advantage in terms of user acquisition and engagement.
The decision in this case could have significant implications for the way technology firms buy distribution for their products and services. If Judge Mehta puts severe restrictions on Google’s capacity to pay for preferred placement, it would radically change competitive dynamics not only in search but increasingly in the AI marketplace as well.
Both Google and Samsung are plagued with uncertainty regarding their long-term partnership agreements as hearings continue, and rivals such as Microsoft, Meta, and OpenAI will probably be keeping a keen eye out for possibilities if Google’s payment practices remain limited.
