Google’s Defeat in the ‘Monopoly’ Trial Is Apple’s Defeat Too

Google has been declared a monopoly, paying device manufacturers and limiting competition in the search engine market.

While this is a major setback for the tech giant, it is also a headache for Apple as the company stands to lose a lucrative $20 billion contract with Google.

As Google is forced to re-comply with regulations, companies like Microsoft and OpenAI could benefit from working with Apple.

Earlier this week, a US judge ruled against Google in a high-profile antitrust case, finding that the tech giant has an illegal monopoly on the search engine industry.

While this is certainly a setback for Google, it is also a serious problem for Applewhich is now at risk of losing its $20 billion deal with Google. Let me explain.

Google has been accused of maintaining a monopoly on online search by paying companies like Apple to keep Google as the default search engine on their devices. To that end, Google paid Apple a staggering $20 billionwhich accounts for about 36% of Safari search engine advertising revenue.

On paper, the original Google-Apple deal doesn’t extend for another two years, as it expires in September 2026. Additionally, Apple has (or had) the option to renew it. However, it could be that the deal is canceled, as Google needs to get back into compliance.

The contract can also be canceled directly by the court in itself, since this lawsuit reportedly only sought to decide whether Google had violated antitrust laws or not.

Separate legal proceedings are expected to be held to decide what steps Google must take to remedy its violations. This could include ending its contract with Apple.

The final outcome of the “remedial phase” is still years away, though, and there could be potential appeals from Google that could drag the case out until 2026, so Apple has some time to catch its breath.

What options does Apple have now?

If Apple’s agreement with Google is reached and terminated, profits will fall by 4-6%. But the good news is that it has a few options up its sleeve to weather the storm.

Apple could strike a similar deal with Microsoft’s Bing or AI-powered search engine OpenAI. Both companies would no doubt be thrilled to have an advantage over Google when it comes to online search.

However, if Apple wants to avoid any future scrutiny, it will have to avoid such exclusive deals. In that case, it can focus more on adding new technologies to its devices through partnerships.

For example, Siri has already been integrated with ChatGPT, and Apple is also in talks with Google to add the Gemini chatbot to iPhones. Another option Apple has is to invest in its own search product using OpenAI technology.

About the lawsuit against Google

The antitrust lawsuit was filed by the Department of Justice (DOJ) and a group of U.S. states in 2020, but the trial did not begin until 2023.

The main accusation was that Google currently controls 90% of the search industry and it does this by paying companies like Apple, Mozilla and Samsung to make Google the default search engine on their devices.

According to regulatory authorities, hinders healthy competition in the market and it is unfair to Google’s rivals who are much smaller companies and do not have as many resources as Google.

Monopoly in the search industry means Google is also gaining a dominant position in the sponsored advertising industrywhich further widens the gap between Google and other competing search engines.

Google disagrees with the accusation of illegal monopoly. It decided to appeal the verdict.

“This decision recognizes that Google offers the best search engine, but says we shouldn’t be able to make it easily accessible.” – Kent Walker, Google’s global president

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