As reported here last year, the Department of Justice alleged in an antitrust suit that Google had paid Apple between $8 billion and $12 billion to hold the default search status on iPhones and other Apple devices. The DOJ pointed to the deal to make its case of how Google uses its profits to sideline its rivals, and to show just how much search is worth.
In order to maintain its leading search position on Apple products, Google may have to pay Apple close to $15 billion this year. This information is based on a recent research note from Bernstein analyst Toni Sacconaghi, according to the website Android Central. Apple’s public filings and a study of Google’s traffic acquisition expenses ultimately yielded the $15 billion number. For further information, go to: Antitrust lawsuit threatens a multibillion-dollar deal between Apple and Google.
The report notes that there’s also a risk that regulators could block similar deals between Apple and Google, a move that could lead to a 4 to 5 percent impact on Apple’s gross profits. Apple has said it supports Google because it is the most popular search engine, but notes users can easily change to different alternatives. Read more: House Bill Could Split Up Big Tech Companies
According to Android Central, Sacconaghi suspects Google could pay more this year to prevent Microsoft from outbidding it. At the same time, the tech giant could revisit its strategy soon and try to renegotiate with Apple, as the payments could balloon to $20 billion next year.
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This is all playing out against a backdrop of proposed laws and regulations aimed at curbing the power of Big Tech companies, both in the U.S. and overseas. Among the possible curtails is the Ending Platform Monopolies Act would make it illegal — in the words of the bill — for “a covered platform operator to own or control a line of business other than the covered platform, when the covered platform’s ownership or control of that line of business gives rise to an irreconcilable conflict of interest.” For now, just four companies — Google, Amazon, Facebook and Apple — meet the parameters set in the bill.