Apple might lose up to $15 billion a year if the Justice Department forces Google to cease paying the business to be the default search engine on all iPhones.
Google is the default search engine on iPhone web browsers. Although anyone can alter this setting, nearly no one does, sending over a billion iPhone users’ traffic (and ad money) to Google.
Bernstein analysts predict Google will pay Apple $15 billion in 2021 and $18-$20 billion this year. Apple‘s gross profit was $152 billion last year, so losing Google payments would shave 10% off.
This relationship between the two internet giants dates to the early 2000s. Regulators accuse Google of anti-competitive actions to preserve search supremacy.
DOJ attorney Kenneth Dintzer argued Thursday in the antitrust complaint that Google invests billions in defaults knowing consumers won’t change them. They buy default exclusivity because defaults matter.
The DOJ’s antitrust suit against the California-based corporation began in Trump’s final days in office. States are also suing Google antitrust.
DOJ anti-trust stance
According to a Bloomberg story, Google pays billions of dollars to be the default search engine on most browsers and US cellphones.
DOJ attorney Kenneth Dintzer told the judge, “Google invests billions in defaults, knowing people won’t alter them.” Because defaults matter, they buy default exclusivity.
9To5Mac reports that Google paid Apple $1 billion in 2014 to be the iPhone’s default search engine. This year, it could reach $15-$20 billion.
Google’s attorney, John Schmidtlein, argues the DOJ and states are focusing too much on tiny search engines and that Google’s main competition is ByteDance, Meta, Amazon, Grubhub, and other search sites.
Dintzer says that Google’s contracts make it the ‘gateway’ through which most people access webpages online, preventing rivals from reaching the scale needed to challenge its search engine.
This is only the hearing. The trial won’t begin until next year. If Google loses, it will stop sending extravagant payouts to its contractors, losing them money.
Google isn’t the only tech firm with legal woes. Samsung has its own data breach case.
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