- Google pays Apple at least $20 billion a year to make its search engine the default on iPhones.
- Those payments were at the heart of a federal antitrust case Google lost earlier this year.
- Now, the government will ask a judge to ban those payments. But it’s not a done deal.
Apple makes billions of dollars a year from Google. But a federal judge’s ruling could make that money disappear.
That’s because a long-running deal between Apple and Google, where Google pays Apple at least $20 billion a year to make Google the default search engine on iPhones, is at the heart of the US government’s antitrust case against Google. And Google lost that case earlier this year when Judge Amit P. Mehta ruled that Google has an illegal monopoly in search.
On Wednesday, the US Department of Justice is expected to unveil a list of steps it wants Mehta to take to punish Google. Among the remedies the DOJ is asking for, per The Wall Street Journal: Forcing the company “to stop paying partners such as Apple billions of dollars a year to make Google’s search engine the default on web browsers.”
Which makes sense, since that was a big focus of the government’s case. (Though, confusingly, an earlier Bloomberg report about the DOJ’s plan focused on forcing Google to sell off its Chrome browser and never mentioned the Apple payments.)
In any case: If Google really is prevented from paying Apple, that could be meaningful for Apple’s efforts to make money from services, which have become increasingly important to the company as iPhone sales flatten.
But even if that happens, it doesn’t mean Apple automatically loses all the money Google pays it every year. It’s possible that another provider, like Microsoft’s Bing, could step in to make its own payments to Apple for the same prime real estate.
And while the DOJ’s request, and Mehta’s eventual ruling, are all important, they’re not the end of the story. Google has said it will appeal the ruling. I asked Google and Apple for comment.
One more complexifier: How will the incoming Trump administration treat this case?
On the one hand: Trump’s first administration filed the original antitrust complaint against Google, and there are lots of people in Trump’s orbit who are upset with Big Tech.
On the other hand: Trump has a record of selective enforcement, and Apple CEO Tim Cook built a rapport with him during the first go-round — which helped Cook convince Trump to exempt Apple products from China tariffs. This one will take quite a bit of time to unspool.
