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Google and Apple have emerged victorious after US District Judge Amit Mehta’s delivered a significant ruling in relation Google’s antitrust case, allowing the IT giant to keep its Chrome browser and Android system operating while continuing to deliver payments to Apple.
This decision marks a win for big tech against antitrust enforcers, but Google is obliged to share data with competitors to open up competition in online search.
Google’s Five-Year Antitrust Battle and Data Sharing
Google has been facing legal challenges for five years from US antitrust regulators due to Google’s dominance in online search and advertising. In 2024, Judge Mehta ruled that Google holds an illegal monopoly in the industry.
Despite this, the judge was cautious, stating the rise in AI-driven competitors like ChatGPT and Perplexity are threatening Google’s dominance in search engine. The ruling ensures Google avoids a company breakup with a requirement of changes for competition promotion. ⁽¹⁾
To address Google’s monopoly, Judge Mehta ordered the company to share search data with its competitors. This move was made to support competitors in the search and advertising industries, including AI companies that are developing chatbots. While this could challenge Google’s dominance in the long term, the impact could be small, especially as AI continues to impact search engines. ⁽²⁾
Google Gets to Keep Chrome and Android
The ruling also allowed Google to keep Chrome and Android OS, which are both important for Google. Markets cheered for the good news, with Alphabet’s stock price closing 9.3% higher at $230.63 per share on Wednesday, September 3rd. ⁽³⁾
Perplexity, an AI startup, was keeping an eye on Chrome in order to acquire it for $34.5 billion, but the acquisition was dismissed. The importance of keeping Chrome and Android for Google removed major concerns for investors, who see them important for Google’s main operations. ⁽⁴⁾
Google Continues to Pay Apple with Conditions
Google has agreed to continue to pay Apple for securing Google’s default search engine on Safari, Apple’s default browser, with payments amounting to $20 billion annually. These payments are part of Apple’s services segment, generating $96.2 billion in 2024. The news caused Apple stock to close 3.88% higher at $238.43 per share on Wednesday, September 8th. ⁽⁵⁾
However, there were conditions imposed on the payments where Google’s agreements with Apple are not fixed, giving Apple the chance to negotiate deals annually. The other conditions state that Google cannot force partners to not use apps and services from competitors, as Apple is already competing with rivals like ChatGPT with its Apple Intelligence platform. This allows Apple to be flexible in forming new partnerships.
A Win for Apple Amid Challenges
For Apple, the ruling secures a highly profitable revenue stream. Google’s $20 billion contributes heavily to Apple’s Services segment, which represents a 75% gross profit. Losing this income would really hurt Apple, especially as iPhone revenue growth has kept slow at 2% annually for three years now. Apple is facing pressure from the US-China trade war and being behind in the AI race, with iPhone sales expected to grow less than 4% in the next fiscal year. ⁽⁶⁾
The ruling allows Apple to maintain its financial stability while exploring new opportunities, such as integrating AI search options to counter a reported decline in Safari searches.
Why did the Ruling Matter?
Judge Mehta’s ruling indicates a balance between Google’s monopoly and recognizing the evolving tech industry. The judge declined to prevent Google’s payments to Apple, arguing that if it was prevented, it could strengthen Google by giving it free access to Apple’s user base. Instead, he stated letting “market forces” drive competition, pointing to AI innovations as a natural check on Google’s dominance. ⁽⁷⁾
For Google, keeping Chrome and Android while continuing payments to Apple is a major win for both companies, even though Google still faces other legal challenges in Europe.
