We’ve all overslept an alarm or missed a deadline, but has it ever cost you $20 billion? According to Ars Technica, it may have just happened to Apple, which apparently suffered from some decision paralysis that pissed off a federal judge and might cost the company its lucrative agreement with Google to make the company’s search engine the default on Apple devices.
Apple’s feet-dragging is related to an upcoming hearing for the Department of Justice’s antitrust case against Google, which resulted in a federal court ruling the company illegally maintained a monopoly over internet search. In response to that ruling, the Department of Justice proposed a number of ways to remedy Google’s law-violating dominance, including ending deals that made Google the default search engine on Apple devices and Mozilla’s Firefox browser.
Apple, understandably, wanted to have a say in that decision and argued in a court filing that it is entitled to participate in the hearing because it has a large stake in how the case is resolved. The only problem, as documented by MediaPost, is that the company made that filing in December, when the DOJ made the proposal in October. Apple tried to argue that it wasn’t clear that its deal could be in jeopardy until November. But, even then, the court pointed out the Cupertino company waited 33 days to respond—a delay that the appeals court said was “difficult to justify.”
So now Apple will be sidelined for the trial—able to submit written testimony but barred from the live hearing that is set to start in April. At stake is the company’s exclusivity agreement with Google, which has been in place for years and generated $20 billion for Apple as recently as 2022. That’s estimated to be about 25% of Apple’s total services revenue in 2022. And if the court decides to cancel the deal between the two companies, Apple gets stuck in a pretty difficult spot.
Apple initially wanted to go with Yahoo, according to details that came out of the DOJ’s trial, but it ultimately landed on Google because it got an offer too good to turn down. Why spend resources on developing one’s own search engine when you could focus on building your walled garden and cashing billion-dollar checks from one of your biggest competitors? Most people don’t ever change their default browser, so taking that spot basically guarantees most search traffic from Apple devices will go through Google’s platform. At least until that deal potentially ends due to this case. Guess the company should have filed that brief a little earlier.
