Apple Inc. (NASDAQ:AAPL) may be facing potential fallout from Google's recent antitrust defeat in court.
What Happened: A federal judge ruled against Google's parent Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) in a significant antitrust case. The case revolved around Google's alleged illegal monopoly in search, with a focus on exclusive deals with platforms and device-makers for default search engine status.
The most notable of these deals is with Apple, where Google pays Apple billions of dollars annually for prime placement on the iPhone. In 2022 alone, this deal was worth $20 billion, Business Insider reported on Monday.
Judge Amit P. Mehta's ruling, which suggests these deals hinder competition, could jeopardize this lucrative revenue stream for Apple if upheld and Google is required to cease exclusive search deals.
Despite Tim Cook-led Apple's massive size, with nearly $400 billion in revenue last year, the Google deal is a vital part of Apple's "services" business. As iPhone sales slow, the growth of high-margin services revenue has become increasingly important for Apple.
Why It Matters: The antitrust crusade against Google was led by Jonathan Kanter, Assistant Attorney General for the Antitrust Division of the DOJ, who has been a pivotal figure in recent antitrust enforcement actions against major tech firms, including Google and Apple.
Earlier in 2024, Apple had challenged the DOJ's antitrust case, stating that the government's complaint does not allege anticompetitive conduct, substantial anticompetitive effects, or monopoly power in a relevant market. However, the recent ruling against Google indicates a shift in the legal landscape that could potentially impact Apple's future dealings.
Price Action: Apple was trading 1.40% lower than its previous day's close in the pre-market on Tuesday, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari