Google’s New Monopoly Status Has Unexpected Collateral Damage: Apple

Google was recently dealt a significant blow by a U.S. federal judge, who ruled that the company has unlawfully monopolized the search market through exclusive agreements. This verdict has brought into question the future of Google’s $20 billion-a-year deal with Apple.

Why this matters. The Apple deal has played a crucial role in Google’s dominance in search, particularly in the mobile sector. If the deal is terminated, it could reshape the technology industry landscape.

Here’s what’s at stake:

• Google could potentially lose exclusive access to over 1 billion iOS devices.
• Apple would lose a substantial source of income, accounting for around 20% of its annual profit.
• This ruling could create opportunities for new competitors in the mobile search market, especially at a time when generative AI is booming.

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Reading between the lines. Although this decision is a setback for Google, the situation could have an unexpected turn. If the solution is similar to the one applied by the European Union in the browser space, which forces operating systems to offer search engine options by default, Google could benefit.

• Google would be saved from making a multi-million-dollar payment to Apple.
• Most users would probably still choose Google as the best, or at least the most familiar, option.

Currently, Google holds close to 95% of the market share for mobile search.

The big unknown. Will Apple take advantage of this situation to launch its own search engine? If Apple doesn’t renew its deal with Google, it would have a strong motive to create its own alternative.

Apple’s strong focus on privacy and its ecosystem could make its proposal well-received, but competing with Google won’t be easy.

The future. Anyhow, this case is a significant development in the regulation of tech companies. Interestingly enough, it’s happening in the U.S. rather than the usual source of such actions, the EU, which tends to be more lenient with companies.

Google has deals with other manufacturers and browsers, but if it were to lose this agreement with Apple, Google will still be a well-established company and will be able to survive. However, smaller players like Firefox or Opera could face consequences if they lose this source of income.

This article was written by Javier Lacort and originally published in Spanish on Xataka.

Image | Brett Jordan

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