Google can avoid an antitrust lawsuit if it terminates the agreement with Apple
Kyiv • UNN
Google can avoid antitrust actions by terminating its default search agreement with Apple. This could cost Apple up to $20 billion in profits, but will accelerate its transition to AI-based search services.
Analysts estimate that if the deal is canceled, the iPhone maker's profits could be reduced by $20 billion.
Writes UNN with reference to Reuters.
Apple's deal with Google may be in jeopardy after a US court ruled that the Alphabet-owned search giant is involved in an illegal monopoly.
Potential remedies for Google to avoid antitrust actions may include terminating the agreement that makes the search engine the default search engine on Apple devices.
According to Morgan Stanley analysts, Google pays Apple $20 billion annually for this privilege, which is equivalent to 36% of advertising revenue from searches performed through the Safari browser. According to analysts, if the deal fails, the iPhone maker's profits could fall by 4-6%.
The agreement is valid at least until September 2026, and Apple has the right to unilaterally extend it for another two years, the media reported in May, citing a document submitted by the Ministry of Justice in the antitrust case.
Apple will also have several options, including offering customers alternatives such as Microsoft Bing for customers, or perhaps a new search product based on OpenAI.
Analysts agree that this decision will accelerate Apple's transition to AI-based search services.
The company said that it is also in talks with Google to add the Gemini chatbot, and plans to add other AI models.
Apple is also updating Siri with artificial intelligence technology, giving it more control to perform tasks that previously proved difficult, such as writing emails and interacting with messages.
