20 billion US dollars a year: Google search deal with Apple can continue
On Tuesday, a US district court ruled more leniently against Google than had been expected in the antitrust proceedings. Apple can probably rejoice.
Different browsers on an iPhone: Google should remain the default search in Safari.
(Image: Primakov/Shutterstock.com)
Since the current monopoly proceedings against Google, which were initiated by the US Department of Justice (DoJ), have been underway, Apple has feared losing a huge chunk of its services business. The iPhone company is said to earn a good 20 billion US dollars a year by implementing Google as the default search in the browser on the iPhone, Mac, or iPad. And for a long time it was questionable whether the business would be allowed to continue. Amit P. Mehta of the United States District Court for the District of Columbia is likely to have brought relief to Cupertino on Tuesday: In an important decision, he ruled that while Google must give competitors more space and refrain from doing certain things, contracts like the one with Apple may continue. However, there are now likely to be changes here too.
Search engine no longer exclusive
According to Mehta, Google should remain allowed to "pay for the distribution of its products", as the Wall Street Journal reports. This is because a ban on such contracts could unduly harm partners such as Apple. Nevertheless, Google is no longer allowed to pay money to be the "exclusive" search engine on devices or in a browser. However, this is not necessarily the case even now: Apple must place so-called choice screens in the EU, for example, so that customers can select the browser. The question now is what this means for the search deal with Apple. Google could pay out a lower participation rate. However, this is currently still speculation, and the practical implementation of "non-exclusivity" is still open.
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Mehta had previously ruled last year that Google had monopolized the search market for more than ten years. The judge wrote that Google had concluded "illegal distribution agreements" with companies such as Apple in order to ensure that the market share of Google search remained at 90 percent. This meant that competitors had no chance of developing competitive alternatives. However, the orders that Mehta has now issued are more in Google's favor: the company does not have to sell the Chrome browser, as it feared, but it does have to hand over more search data to competitors. Google's parent company Alphabet will not lose control of Android, either. However, Google may not link the licensing of its Play Store on Android devices with the compulsory provision of other apps – such as Chrome.
AI deal with Apple could be on the cards
Google stated that Mehta's ruling recognizes that the industry has changed due to AI (search engines). Competition is "intense" and people can "easily choose the services they want". Observers assume that Apple and Google could now cooperate more closely on AI – possibly via Gemini in the operating system or at least in the browser.
It is fitting that a possible purchase of Anthropic by Apple has receded into the distance after a new round of financing pushed the valuation ("post-money") to 183 billion dollars. Apple did not initially comment on the ruling. In pre-market trading, Apple shares gained significantly and are currently up 2.82 percent.
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