A US judge’s ruling has said that Google operates an illegal monopoly which has put its lucrative deal with Apple at risk.
The deal, valued at $20 billion per year, established Google’s search engine as the default choice on Apple devices.
To avoid antitrust actions, Google may need to terminate the agreement, according to Wall Street analysts. This could lead to a 4-6% hit to Apple’s profit.
The pact which is said to run until at least September 2026, with Apple having the option to extend it for another two years.
Evercore ISI analysts predict the judge would rule that Google must no longer pay for default placement or that companies like Apple must prompt users to select their search engine.
Apple’s shares were flat on Tuesday, while Alphabet was little changed after a 4.5% drop on Monday.
University of Pennsylvania law professor Herbert Hovenkamp warned that dominant market positions must avoid exclusive agreements and ensure buyer choice.
The remedy phase could be lengthy, with potential appeals to the US Court of Appeals, District of Columbia Circuit, and US Supreme Court, potentially dragging on until 2026.
Boluwatife Enome
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