Why could google make more than $ 20 billion in Apple

At first glance, it is a matter that does not concern Apple. The apple group could however lose very large in April when American justice must decide on the remedies that Google will have to be put in place after its condemnation for abuse of dominant position in online research. But he most likely will not be able to defend his interests. Last week, the judge in charge of the file estimated that he will not be able to participate in the hearings planned for the spring. On the one hand, because it had been too late manifested. On the other hand, because he had not demonstrated that the evidence he could present would bring new elements. On Monday, the same judge also refused to suspend the case while the appeal brought by Apple on his first decision was examined.
Commercial agreements – Last August, at the end of a procedure launched in 2020, Google was found guilty of anti-competitive practices, allowing it to illegally maintain its quasi-monopoly in online research-almost 90% of the market in the United States. Several devices were targeted, including the multiple trade agreements to ensure the default engine of the competitors of its Chrome browser. These partnerships signed in particular with Apple, Firefox and Samsung, allow it to benefit from major distribution advantages, preventing its rivals from reaching the critical size necessary to be really competitive. At the end of 2023, the Department of Justice therefore asked to ban them for a period of ten years. Google proposes to give up exclusive clauses.
Safari engine – The agreement concluded between Google and Apple is, by far, the most important. This allows the first to be the default engine on Safari, the internet browser of the second, used by the majority of iPhone, iPad and Mac owners. In exchange, the Cupertino group perceives a percentage of the recipes generated by research on safari – but also on the Chrome browser. Bothed for the first time in 2005, this partnership became more and more strategic for the company, while the apple terminals have gained popularity. It allowed him to prevent another actor from capturing this research – six times, Microsoft has also tried to take his place to try to boost the Bing market share. And also to prevent APPLE from launching a competing search engine.
20% des profits d’Apple – The current agreement runs until 2028, with an option to extend it for three years. The sum paid by Google has long been kept secret, but Apple recognized during the trial that it had affected $ 20 billion in 2022. This represented 20% of its annual profits. If the judge prohibits commercial pacts, the Cupertino firm will have a hard time generating an equivalent sum. No engine could indeed guarantee such an amount. Not even Bing from Microsoft, whose advertising platform is less efficient. In addition, launching a home engine promises to be complex and risky – a project had been initiated in 2018 before being abandoned. And would be less lucrative, at least in the short term. In both cases, a large part of the users will immediately rebound on Google, without any commission for Apple.
To go further:
– Google soon forced to sell Chrome?
-In the United Kingdom, Apple faces a first class class at high risk