Google’s $20 Billion iPhone Search Deal Under Threat Amid Antitrust Lawsuit

Google disburses an estimated annual sum ranging between $18 billion to $20 billion to maintain its search engine as the primary option on iPhones, The Register reports.

Google logo icon illustration free vector

This high-value partnership has come under scrutiny, with concerns that it may face termination if the Department of Justice (DoJ) prevails in its ongoing antitrust lawsuit against Google.

Bernstein, a financial advisory firm that guides institutional investors, has raised concerns about the future of this deal in a recent report.

The antitrust lawsuit initiated by the DoJ alleges Google’s monopolistic control over search and search advertising, with a particular focus on the Information Services Agreement (ISA) between Apple and Google.

“We believe there is a possibility that federal courts rule against Google and force it to terminate its search deal with Apple,” warned Bernstein.

According to their estimates, the ISA represents an annual payment from Google to Apple, accounting for approximately 14-16% of Apple’s annual operating profits.

While the outcome of the Google antitrust case is not expected until 2024, Bernstein suggests that the economic impact on Apple may not be severe.

The trial mainly targets Google, leaving Apple with the option to potentially partner with another search engine or introduce a choice screen for users to select their default search engine.

Google search

Apple’s control over its vast user base, generating over $60 billion in advertising revenues, could still allow the tech giant to command a commission in the range of 25-30 percent for providing access to these advertising revenues.

Moreover, the introduction of a choice screen could pave the way for Apple to launch its own search engine as an alternative.

The legal battle is set to continue, and the outcome will have significant implications not only for Google and Apple but also for similar agreements with companies like Samsung and Mozilla.

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