Regulation

The recent antitrust trial between Google and the U.S. Department of Justice (DOJ) did not target Apple directly. However, the verdict issued this week has shielded Apple from a significant potential revenue loss. At stake were agreements that designate Google as the default search engine on iPhones.

This 17-year-old partnership generates approximately $20 billion annually for Apple. If the court had prohibited these commercial agreements, Apple would have faced a substantial financial deficit.

Judicial Decision

Since August 2024, the U.S. judiciary has recognized Google’s monopoly in online search, necessitating measures to limit its market power. Among the DOJ’s proposals were the sale of Google’s Chrome browser, the potential divestiture of Android, and the prohibition of agreements that allow Google to pay Apple to remain the default search engine on iPhones.

The primary concern for Apple was the potential loss of revenue from these agreements. If Google had been prevented from making such payments, Apple would have lost approximately a quarter of its services revenue.

The judge decided against banning these agreements entirely. Instead, Google is prohibited from signing exclusive contracts but may continue to compensate Apple and others for offering its services as an option or preinstalled. The judge reasoned that halting Google’s payments could harm distribution partners, related markets, and consumers.

Google will maintain its presence on iPhones but must share more data with competitors. Google has appealed this decision, arguing that data sharing could impact its competitive edge.

• Apple avoided losing a major revenue source due to a judicial decision concerning the Google trial.
• The judge barred exclusive contracts but allowed financial agreements ensuring Google’s services on iPhones.
• Google is required to share certain data with competitors, a measure it is contesting on appeal.