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Google will soon be told how to end its monopoly abuse. How that affects Apple

MacDailyNews

Jul 29

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Alphabet investors are eagerly awaiting the judge’s ruling on remedies Google must implement to address its monopoly. Apple investors should also take note.

Angela Palumbo for Barron’s:
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A federal judge ruled in August 2024 that Google maintained a monopoly in general search services and general text advertising. This was done through exclusive distribution agreements with browser developers, smartphone makers, and wireless carriers. Wall Street has since been waiting to hear what remedies the judge will put in place to end the monopoly.
J.P. Morgan analyst Doug Anmuth wrote in a research note on Monday that he believes the remedy decision will come by Aug. 8.
One possible remedy would be the banning of exclusive search engine agreements with companies such as Apple. Currently, Google pays Apple, and Apple in turn makes Google the default search engine on all of its devices.
Anmuth thinks a compromise might be made.
“We see an opportunity for a potential middle ground to be framed in the judgment where Google can make payments to Apple, but only for consumers organically choosing Google as their default General Search Engine,” Anmuth wrote.
The outcome is important to Apple. Anmuth believes the company could lose about $12.5 billion in revenue in addition to the profits it currently receives from Google, which could negatively impact earnings by about 10%.

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MacDailyNews Take: A hungry Apple would have forged ahead with its own search engine long ago. A complacent Apple just sat back taking payments (some estimates are in the are of $20 billion annually) as the inevitable legal intervention loomed. We expect, unlike in GenAI, Apple has a plan. Hopefully, it’s a good plan, an innovative and bold one, not just a mandatory default search engine choice screen thrown up to users* as dictated by a judge.

*90% of whom will choose Google because that’s all they know.

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