Apple Is Not Losing Google's Billions Without a Fight

Apple may be worth one and a half Googles now, but the world's most valuable company needs its relationship with the world's largest search engine to keep clicking. From a report: Such was evident Monday when Apple filed papers seeking to participate in the penalty phase of the Justice Department's antitrust case against Google. The search giant lost that case in August and is now battling the government over what remedies are appropriate. The DOJ has a long wish list that includes breaking the company up, forcing Google to make key search and user data available to potential rivals, and stopping the payments Google makes to partners such as Apple.

The payments to Apple alone now reportedly equate to about $20 billion annually, and make Google the default search engine on devices like the iPhone. Apple didn't confirm any specific amounts in its filing, but did say the company feels compelled to "protect its commercial interests." Analysts widely estimate that the payments from Google are nearly pure profit for Apple, given relatively little incremental cost to generate that revenue. For Apple, $20 billion is about 16% of the operating income reported for the company's fiscal year that ended in September.

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[saloomy]

I am sure if Google can't pay apple, OpenAI or some other service that is coming up will be happy to pay Apple. Apple is allowing users to change their default, which makes them all but immune to lawsuits related to this

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[fred6666]

Of course someone else will pay to be the default. Most likely Bing. However, if Google isn't allowed to bid, I'd expect the deal to be closed somewhere around $2 billions instead of $20 billions.

Here’s a strategy for you

[hdyoung]

Wait until January 20th, after which there will be zero antitrust or regulation activity for the next 4 years. Google offers a token fine or the case gets straight-up dropped. End of strategy.

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[Savage-Rabbit]

Wait until January 20th, after which there will be zero antitrust or regulation activity for the next 4 years. Google offers a token fine or the case gets straight-up dropped. End of strategy.

The bribe they'll have to pay the Orange One will be orders of magnitude higher than any fine they get but I expect it will still be worth it. American politicians are surprisingly cheaply bought.

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[hdyoung]

A few 10s of millions to a T organization would do it. A rounding error compared the cost of an actual breakup.

Re: Here’s a strategy for you

[madbrain]

An actual breakup would never happen anyway, whether the politicians are painted orange or blue. It is needed, though.

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[moronoxyd]

This will never happen. Apple will never give Google for free what Google has to pay $20B now.

I miss iAd

[ctilsie242]

For a while, Apple had their own advertising an analytics, and actually seemed to respect people's privacy, with ads that were not horri-bad like the multiple video takeover adds, the pop-ups, and all the crap that make browsing on mobile essentially unusable without an ad blocker, and an Admiral blocker. Maybe Apple should do this again?

Think of the Firefox users

[CommunityMember]

Apple can probably afford to lose $20B (not that they would want to, but they could afford it). In the case of Mozilla (Firefox), it would be an existential crisis, as the Google money is about 80% of their yearly revenue. Mozilla has enough cash (and cash equivalencies) to survive for a year or two and try to find some other source of revenue, but no one is going to send them Google money.

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[caseih]

It's unbelievable how much cash Mozilla has spent on things other than Firefox developers over the years. It's kind of tragic. Mozilla would have done fine with a budget a fraction of what they got if they had focused on paying developers to make the best browser on the planet.

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[CommunityMember]

It's unbelievable how much cash Mozilla has spent on things other than Firefox developers over the years. It's kind of tragic. Mozilla would have done fine with a budget a fraction of what they got if they had focused on paying developers to make the best browser on the planet.

While there are certainly things many think Mozilla should not have spent money on, the majority is spent on software development and other infrastructure (along with other overheads, like benefits). Those that imagine that they could run the team at a fraction of the expenses must be imagining replacing all the engineers with volunteers.

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[larryjoe]

Apple can probably afford to lose $20B (not that they would want to, but they could afford it).

Apple, the company, can afford to lose $20B a year without impacting operations. Apple, the empoyees and executives who make decisions based on stock compensation, absolutely would be devasted by losing $20B out of $123B in profit. The stock would immediately tank.

Re: Think of the Firefox users

[dj245]

Someone might. Google was the way to find answers on the Internet for a long run, but there are a number of AI companies now who are taking market share and would be glad to stake that ground.

Waste of $20 Billion

[bubblyceiling]

Google is already the market leader in search without any close rivals. It seems extremely stupid to continue to pay Apple for something users will already default or not to on their own.