Google has been paying Apple hefty amounts to remain at the top of the list as far as its Search Engine is concerned, and as per the latest ruling, the agreement between the two giants could soon be considered void. A court ruling recently declared that all of Google's payments to Apple are illegal under antitrust law. It remains to be seen how Apple would handle the loss, as Google's payments account for about a quarter of revenue on the services side of things.
Apple could lose a $20 billion deal from Google over its antitrust case
If you are not familiar with it, typing anything in the search bar in Safari would derive results directly from Google unless you have manually set another search engine. This tiny operation costs Google more than $20 billion on an annual basis, but it also generates a huge sum through advertisements. It is still a great deal for Google because Apple customers are a valuable demographic for advertisers, given the fact that the iPhone is expensive and anyone who owns it falls over the average income mark.
For Apple, Google's payments are free as it does not have to make any major changes in the operating system. It was discovered in a court ruling in 2022 that Google paid Apple a whopping $20 billion sum to remain as the default search engine. The company has been handling an ongoing antitrust case since 2020, which details that Google has been maintaining its monopoly in the web search category.
With Google paying Apple a huge sum, other search engines hold a disadvantage in the market, which led the Department of Justice to declare that Google's behavior in the field is indeed illegal. While it is too early to conclude, Google could stop making payments to Apple to resolve the matter to some extent, but how would Apple respond once the money stops coming in as a major portion of its total services revenue comes from Google?
It is worth noting that Apple's services sector is on an upward trajectory, with $78.13 billion in revenue, out of which $20 billion was paid by Google. This means that Apple will make up for the losses as it grows its services sector, but it is not clear if the court's ruling would have an impact on the agreement between the two companies. We will keep a close eye on the case and update you guys as soon as further details are available.
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