Christian Carlos. Peninsula 360 Press. [P360]
The U.S. Department of Justice has Apple and Google in its sights. The lucrative deal between these two big companies represents one of the largest antitrust cases ever handled by the U.S. government, reports The New York Times.
On Tuesday, the Department of Justice filed an antitrust lawsuit against Google, alleging that the Mountain View-based company used practices that do not foster market competition and that, to the contrary in the search and advertising markets to maintain an illegal monopoly.
In 2017, Apple renewed its agreement with Google's search engine so that Apple devices, in its ?Spotlight? feature, Safari ?the default browser? and Siri ?virtual assistant? would default to Google's search engine over Yahoo, Microsoft's Bing ?and DuckDuckGo.
The New York Times reports that Apple receives between $8 billion and $12 billion per year for this deal with Google. To date, it is believed that this could be the fattest payment Google makes to a third-party company; this deal favors Apple with a whopping 14 and 21 percent of Apple's annual profits.
The tech community has been bold enough to point out that this sum has become the main source of Apple's product development year after year. The proof can be found in the innovative proprietary ARM architecture chip, the A14 Bionic, the heart of the new iPhone 12 mini, iPhone 12, iPhone 12 Pro, iPhone 12 Pro Max and iPad Air in 2020. This is not to be taken lightly, as it is the first processor for mobile devices that would surpass the 3Ghz mark, representing more than 33% performance over its previous chip, the A13.
Apple does not store its users' data. However, according to the Department of Justice, almost half of the searches that Google receives are made from Apple devices. For Google, losing this agreement would mean a hard blow for the company, so much so, that it would enter into crisis.
The business is profitable for Google, as its business model is based on AdSense - Google's ad system -.
Apple does not have much room for maneuver either, since Google is the number one search engine on the Internet. This situation generates a monopoly on the part of Google and not Apple, since, as mentioned, the default options of macOS, iOS, iPadOS, watchOS and tvOS - the latter two through Siri - can be migrated with an update.
The DOJ complaint cites a senior Apple employee's comment that he made in 2018, "Our vision is that we work as if we are one company."
While the consequences may impact Apple, they represent a catastrophic danger for Google, as Google would have no alternative to an ecosystem larger than that of the company led by Tim Cook. The New York Times speculates what the tech community already rumored: that Apple will either absorb some search company, or, as it did with Apple Maps, create its own search engine which, in turn, would pose a greater threat to Google, as Apple would be becoming independent from Google.
