Google could pay close to US$15 billion to Apple this year in order to retain its dominant search position on Apple products.
That report comes from the website Android Central, citing a new research note from Bernstein analyst Toni Sacconaghi. The US$15 billion figure comes from Apple’s public filings and analysis of Google’s traffic acquisition costs payments.
As reported here last year, the Department of Justice (DOJ) alleged in an antitrust suit that Google had paid Apple between US$8 billion and US$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.
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 US$20 billion next year.
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% impact on Apple’s gross profits. Apple has stated it supports Google because it is the most popular search engine, but notes users can easily change to different alternatives.
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