Google was spared the worst possible judgement in its antitrust case, and this came as a relief not just for Google but also for Apple. A judge allowed Google to keep Chrome and Android under its fold and continue to pay tech companies to promote its search engine.
Judge Amit Verma ruled that Google cannot enter into exclusive agreements with companies, but it will be permitted to continue paying partners to distribute its services. This means that the company can continue paying Apple billions to remain its default web browser search option. The judgement comes as a relief to Apple as it can continue to receive a sizable amount from Google, and does not have to deal with the question of what web browser to use as a replacement. Finding a new search provider would have been challenging for Apple, which is already navigating changes to App Store because of EU regulations and struggling to keep pace in AI, which has started to replace search engines to an extent.
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“This was a black cloud worry over Apple’s stock as investors worried a Google Chrome breakup and/or forced to extinguish the search deal with Apple was potentially on the docket,” Wedbush Securities analyst Dan Ives said in a research note following the ruling. Analysts added that this “is a monster win for Cupertino and for Google it’s a home run ruling that removes a huge overhang on the stock.”
Ives and his team also said the outcome is “broadly favorable for Google, in our view, with the court ruling against the most severe remedy proposals introduced by the DOJ.”
Google is currently the most pervasive search engine, occupying roughly 90% of global search engine usage as of August, according to web analytics company Statcounter Global Stats. If Apple isn’t allowed to partner with Google, it will have to choose a less popular option, or develop its own search engine.
Eddy Cue, Apple’s senior vice president of services mentioned last year that the company was not keen on developing its own search engine. “Apple is focused on other growth areas. The development of a search engine would require diverting both capital investment and employees because creating a search engine would cost billions of dollars and take many years,” Cue said.
“A viable search engine would require building a platform to sell targeted advertising, which is not a core business of Apple. Although Apple does have some niche advertising, such as on the App Store platform, search advertising is different and outside of Apple’s core expertise.”
While the recent judgement has been welcomed by tech industry groups and investors, not everyone is pleased with it. Many of thinktanks and advocacy groups had long called for Google to be broken up for its monopolistic tactics, arguing that forceful action was needed to restore meaningful competition. Critics of the judgement claim that the ruling will reinforce Google’s dominance and set a precedent that big tech need not fear serious consequences for breaking the law.