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Apple could lose $15B if DOJ forces Google to stop paying to be iPhone’s default search engine

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Apple stands to lose as much as $15 billion a 12 months if the Justice Department forces Google to stop paying the corporate to be the default search engine on all iPhones – as regulators query the legality of the longtime arrangement. 

Anytime iPhone users open an online browser to enter a search query, it all the time defaults to Google. Despite the fact that anyone can change this setting, almost nobody does, leading to an enormous amount of traffic (and ad revenue) to Google from over a billion iPhone users worldwide. 

Analysts from Bernstein estimated that Google’s payment to Apple would increase to $15 billion in 2021 and as high as $18-$20 billion this 12 months, reports 9to5Mac

Apple stands to lose as much as $15 billion a 12 months if the Justice Department forces Google to stop paying the corporate to be the default search engine on all iPhones

The contracts are the basis of the DOJ's antitrust against the California-based company, which began in the closing days of the Trump administration and won't head to trial until sometime in 2023

The contracts are the premise of the DOJ’s antitrust against the California-based company, which began within the closing days of the Trump administration and won’t head to trial until sometime in 2023

Last 12 months, Apple’s total gross profit was over $152 billion – so losing the Google payments would shave a minimum of 10% off. 

This arrangement between the 2 tech behemoths that dates to the early 2000s is under threat – with regulators accusing Google of anti-competitive practices to keep up its dominance within the search business. 

‘Google invests billions in defaults, knowing people won’t change them,’ Department of Justice attorney Kenneth Dintzer said during a Thursday hearing within the antitrust case. ‘They’re buying default exclusivity because defaults matter loads.’ 

The contracts are the premise of the DOJ’s antitrust suit against the California-based company, which began within the closing days of the Trump administration. States are also pursuing a parallel antitrust suit against Google. 

'Google invests billions in defaults, knowing people won’t change them,' Department of Justice attorney Kenneth Dintzer said during a Thursday hearing in the antitrust case. 'They are buying default exclusivity because defaults matter a lot'

‘Google invests billions in defaults, knowing people won’t change them,’ Department of Justice attorney Kenneth Dintzer said during a Thursday hearing within the antitrust case. ‘They’re buying default exclusivity because defaults matter loads’

In line with Bloomberg, Google’s attorney John Schmidtlein said that regulators misunderstand the marketplace and may focus less on search rivals like Microsoft’s Bing and more platforms like TikTok, Amazon, Meta and Grubhub – where countless users being their searches today. 

‘You don’t must go to Google to buy on Amazon. You don’t must go to Google to purchase plane tickets on Expedia,’ he said. ‘The indisputable fact that Google doesn’t face the identical competition on every query doesn’t mean the corporate doesn’t face tough competition.’

Analysts from Bernstein estimated that Google's payment to Apple, led by CEO Tim Cook (above), would increase to $15 billion in 2021 and as high as $18-$20 billion this year, reports 9to5Mac .

Analysts from Bernstein estimated that Google’s payment to Apple, led by CEO Tim Cook (above), would increase to $15 billion in 2021 and as high as $18-$20 billion this 12 months, reports 9to5Mac .

Even so, all of the user data that Google gains from Apple’s massive following actually helps grow its search engine profitability. It already has the most well-liked browser, Chrome, with a 69% market share, and the second-most popular smartphone operating system, Android. 

Dintzer said Google’s contracts with Apple, together with smartphone makers like Samsung and Motorola, plus Verizon, T-Mobile and AT&T, make it the default search engine and ensure it’s preinstalled on phones, in order that it’s becomes the ‘gateway’ to the web for most individuals. 

‘Default exclusivity allows Google to systemically deny rivals’ data,’ he said, per Bloomberg.

Lawmakers and consumer advocates have long accused Google of abusing its dominance in online search and promoting. The continuing case says that Google uses billions of dollars collected from advertisers to pay phone manufacturers to make sure Google is the default search engine on browsers. 

That arrangement kills competition and innovation from smaller upstart rivals to Google and harms consumers by reducing the standard of search and limiting privacy protections and alternative search options, the federal government alleges.

On the time the lawsuit was filed in October 2020, Google vowed to defend itself and said: ‘Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they decide to — not because they’re forced to or because they’ll’t find alternatives.’

The Justice Department’s case against Google won’t head to trial until sometime in 2023 and even when it loses, Google will appeal. 

Last year, Apple's total gross profit was over $152 billion - so losing the Google payments would shave at least 10% off

Last 12 months, Apple’s total gross profit was over $152 billion – so losing the Google payments would shave a minimum of 10% off

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