Apple's longstanding and highly profitable partnership with Google is now in jeopardy following a recent U.S. court ruling that labels Google's search engine as an illegal monopoly.
Under the agreement, Google pays Apple approximately $20 billion annually to maintain its default search placement on Apple devices. Wall Street analysts highlight that this payment makes up about 36% of Google's search ad revenue through Safari.
If the contract is nullified, Apple could see a significant drop in profits, with estimates ranging from four to six percent. The agreement, set to last until at least September 2026, can be extended further based on Apple's discretion.
The court's decision may compel Google to either cease these payments or require companies like Apple to allow users to choose their preferred search engine actively, rather than automatically setting Google as the default.
Legal expert Herbert Hovenkamp from the University of Pennsylvania suggests that this ruling could have far-reaching implications for dominant companies, urging caution against exclusive agreements that may restrict consumer choice.
Reference(s):
cgtn.com
