Apple snoozed, so now it might lose Google as its default search engine (and $22 billion a year)

Apple risks losing Google as its default search engine, costing $22 billion yearly.

: Apple might face a loss of $22 billion a year from its agreement with Google being under threat. The Department of Justice's antitrust case against Google deemed its monopoly illegal, which might force Apple to lose Google as the default search engine. Despite Apple's late attempt to involve itself, the court barred it from the live hearing. Apple had initially considered Yahoo before settling on Google's more favorable offer.

A recent legal development could significantly impact Apple's finances, as it risks losing its agreement with Google to keep it as the default search engine on Apple devices. In a crucial antitrust trial, the Department of Justice (DOJ) charged Google with having illegally maintained a monopoly over internet search. As a remedy, the DOJ proposed ending agreements that have made Google the default search engine on devices like Apple's. This deal currently brings Apple around $22 billion a year, making it a considerable part of its services revenue.

Apple attempted to insert itself into the proceedings, arguing it has a vested interest due to the financial stake involved. However, Apple delayed its response to the DOJ's proposal by 33 days, far past the initial proposal made in October. As a result, the court rejected Apple's motion and prohibited the company from direct participation in the upcoming trial. Apple is now limited to submitting written testimonies, which diminishes its influence on the court's decision.

Initially, Apple had considered partnering with Yahoo, but eventually chose Google because of a particularly advantageous offer. The convenience of having Google as the default search engine has been a core component of Apple's services, ensuring that most search traffic on Apple devices is channeled through Google. This arrangement essentially guarantees a consistent revenue stream, reinforcing Apple's ecosystem.

Beyond the legal implications, this potential termination of the agreement puts Apple in a precarious position of needing to find a new default search engine partner. Although many users tend never to change their default browser settings, the loss of Google's search engine could challenge Apple in maintaining its competitive edge without considerable internal adjustments or negotiation of new partnerships.

The legal outcome could cause shifts in the dynamics between technology giants, influencing future deals and strategies. Apple's challenge highlights the balancing act companies face between integration and antitrust regulations, while the case itself underscores the regulatory scrutiny technology monopolies increasingly encounter.

Sources: Ars Technica, MediaPost

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