Apple-Google deal faces threat after monopoly ruling against Google

Apple’s lucrative $20 billion annual deal with Google, which sets Google’s search engine as the default on Apple devices, could be under threat after a US judge ruled that Google operates an illegal monopoly.
Apple is nearing its first US retail employee union agreement.

Apple’s lucrative deal with Google, worth $20 billion annually, could be jeopardised after a US judge ruled that Google operates an illegal monopoly. The agreement makes Google’s search engine the default on Apple devices, contributing significantly to Apple’s profits. Analysts suggest that Google might have to terminate this deal to avoid antitrust actions, which could result in a 4-6% profit loss for Apple.

The current pact extends until September 2026, with Apple having the option to prolong it for another two years. However, the judge might rule that Google must stop paying for default placement or mandate that Apple offer users a choice of search engines. Apple’s shares remained flat amid this uncertainty, while Alphabet saw minimal change after a recent decline.

Legal proceedings related to this case could be lengthy, potentially dragging into 2026 with appeals. Meanwhile, Apple might explore alternatives, such as integrating Microsoft Bing or developing a new search product with OpenAI. The company has already announced plans to incorporate OpenAI’s ChatGPT and is negotiating with Google to add the Gemini chatbot.

Apple is also enhancing Siri with AI technology to improve its functionality, aiming to capitalise on new AI advancements despite the potential short-term financial impact of losing the Google deal. This shift towards AI-powered search services could help Apple navigate regulatory scrutiny and open new revenue streams.