<img src='https://news.cgtn.com/news/2024-08-07/Google-antitrust-ruling-may-pose-20-billion-risk-for-Apple-1vSnq23SRSo/img/aad5d87ff7324d248f1ac8bbeff24d1d/aad5d87ff7324d248f1ac8bbeff24d1d.jpeg' alt='Branding on a building at the Google Headquarters in California, the United States. /CFP'
Apple’s longstanding and highly profitable deal with Google faces uncertainty following a U.S. judge’s ruling that Google’s search engine constitutes an illegal monopoly.
Wall Street analysts noted on Tuesday that one way Google could avoid antitrust consequences is by ending its agreement with Apple. Under this agreement, Google pays approximately $20 billion annually for default placement on Apple devices. According to Morgan Stanley, this payment represents about 36 percent of Google’s search ad revenue through Safari.
Analysts have estimated that Apple might experience a four- to six-percent decrease in profits if the agreement is nullified. The contract is set to continue at least until September 2026, with Apple having the option to extend it further.
According to the analysts, the court may require Google to stop paying for default search placement or mandate that companies like Apple actively prompt users to select their preferred search engine rather than setting Google as the default without user action.
This ruling could have broader implications for companies holding dominant market positions and caution against exclusive agreements that limit consumer choice, as noted by legal expert Herbert Hovenkamp from the University of Pennsylvania.
(With input from Reuters)
