Google’s antitrust decision could put Apple at risk of $20 billion

Apple’s good deal with Google may be in jeopardy after a US judge ruled that the search giant owned by Alphabet was acting as an illegal monopoly.

A possible remedy for Google to avoid antitrust actions may include ending the agreement, which makes its search engine default on Apple devices, Wall Street analysts said on Tuesday.

Ticker	Security	Finally	Change	Change %
GOOGLE	ALPHABET INC.	158.29	-0.96	-0.60%
AAPL	APPLE INC.	207.23	-2.04	-0.97%

Google pays Apple $20 billion a year, or about 36% of what it earns from search advertising done in the Safari browser, for the right, according to analysts at Morgan Stanley.

If the contract is terminated, the iPhone maker can take a 4-6% profit on its profits, analysts estimate.

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The agreement runs until at least September 2026 and Apple has the right to unilaterally extend it for another two years, according to media reports in May that cited a document provided by the Department of Justice in the case of antitrust.

“The likely outcome now is a judge’s ruling that Google will no longer pay for default placements or that companies like Apple will have to encourage users to choose their search engine differently. and set it inactive and allow customers to make changes to the settings if they wish,” Evercore ISI analysts said.

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Apple shares were trading on Tuesday, underperforming the broader market after Monday’s global sell-off. Alphabet was little changed, after falling 4.5% in the previous session.

“The message here is that if you have a dominant position in the market with a product, it is better to avoid using special deals and make sure that any deal you make gives the customer a free option to change ,” said Herbert Hovenkamp. professor of law at the University of Pennsylvania.

In fact, the “resolution” phase can take a long time, followed by possible appeals to the United States Court of Appeals, the District of Columbia Circuit and the United States Supreme Court States. The legal dispute could continue in 2026.

HE BREAKED

However, if the tie-up is terminated, Apple will have several options including offering customers alternatives such as Microsoft Bing to customers, or a new search product powered by OpenAI.

Analysts agree that the decision will accelerate Apple’s move toward AI-powered search services. It recently announced that it will bring OpenAI’s ChatGPT chatbot to its devices.

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Moving away from exclusive deals that could help Apple avoid regulatory scrutiny, the company said it is still in discussions with Google to include Gemini communication and plans to add other AI models.

Apple is also updating Siri with AI technology, giving it more control over tasks that seemed tricky in the past such as writing emails and chatting.

While that effort is expected to generate little revenue in the coming years, it can help leverage new technology.

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“Apple may see this as a temporary setback, mainly because it gets a lot of money from Google search sales, but it’s also an opportunity for them to look for an AI solution,” said Gadjo Sevilla, an analyst at Emarketer.