Google’s Defeat in ‘Monopoly’ Lawsuit Is a Major Setback for Apple Too

• Google has been declared a monopolist for paying device makers and stifling competition in the search engine market.
• While this is a major defeat for the tech giant, it's also a headache for Apple, which might lose its lucrative $20 billion deal with Google.
• With Google being forced to get back into compliance, companies like Microsoft and OpenAI can benefit from joining hands with Apple.

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

While this is certainly a setback for Google, it's also a major issue for Apple, which is now at risk of losing its $20 billion deal with Google. Let me explain.

Google was accused of maintaining monopoly over the online search market by paying companies like Apple to keep the Google search engine as default on their devices. For this, Apple was paid a whopping $20 billion by Google, which is roughly 36% of its search ad revenue from Safari.

On paper, the original Google-Apple contract doesn't conclude for two more years, as it expires in September 2026. Plus, Apple has (or had) the option to renew it. However, it might so happen that the deal is canceled, as Google has to get back into compliance.

The deal might also be canceled directly by the court itself because, as per reports, the present lawsuit was only to decide whether Google has violated antitrust regulations or not.

Separate legal proceedings are expected to be conducted to decide the steps Google needs to take to make up for its violation, which might include ending the Apple deal.

The final outcome of the remedy phase" is still years away, though. There could also be potential appeals by Google that could drag the case till 2026, so Apple does have some breathing space.

What Are Apple's Options Right Now?

If Apple's Google deal is done and dusted, its profits will take a 4-6% hit. However, the good news is that it has a few options up its sleeves to weather out the storm.

Apple can enter into a similar deal with Microsoft Bing or OpenAI's AI-powered search engine. Both companies will undoubtedly be elated to have an upper hand over Google when it comes to online search.

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

For instance, Siri has already been integrated with ChatGPT, and Apple is also in talks with Google to add the Gemini chatbot to iPhones. The other 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 DOJ (Department of Justice) and a group of US states in 2020, but the trial didn't kick off until 2023.

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

This, according to the regulators, hampers healthy competition in the market and is unfair to Google's rivals, who are much smaller companies with nowhere near the amount of resources as Google.

A monopoly in the search industry means Google also gets to dominate the sponsored ad industry, which further widens the gap between Google and other rival search engines.

Google doesn't agree with the illegal monopoly accusation. It has decided to appeal against the ruling.

This decision recognizes that Google offers the best search engine, but concludes that we shouldn't be allowed to make it easily available." - Kent Walker, Google's president of global affairs

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