Apple Shares Climb as Judge Allows Google to Maintain Preload Payments

Apple shares jumped over 3% in after-hours trading Tuesday after a federal judge ruled that Google can continue paying Apple to preload its search engine on iPhones, iPads, and Macs.

Although Apple was not a direct party in the antitrust case against Google, the ruling addressed remedies that could have barred the tech giant from paying billions to remain the default search provider on Apple devices.

“Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products,” U.S. District Judge Amit Mehta wrote in his decision. The judge noted that cutting off payments entirely could harm distribution partners, related markets, and consumers.

Google CEO Sundar Pichai and Apple CEO Tim Cook listen to President Biden at a White House business roundtable

The landmark case, initiated by the U.S. Department of Justice in 2020, centers on Google’s dominance in the general search market, alleged violations of the Sherman Act, and barriers Google created to block competitors. Last year, the court ruled that Google held an illegal monopoly in search.

While the judge permitted Google to continue payments, he prohibited the company from entering exclusive contracts for preloading apps or tying revenue-sharing agreements to acceptance of other Google services. This means Apple’s default search deal with Google can continue but cannot be fully exclusive beyond one year.

Google confirmed the decision in a blog post, stating it has concerns about how required data sharing with rivals may affect users’ privacy. Apple did not immediately comment.

The default search agreement with Apple is considered the most lucrative for Google, accounting for billions in traffic and revenue. Analysts predict it could take years before any required changes from the ruling take effect, as Google plans to appeal, with the Supreme Court potentially reviewing the case after all appeals.

Apple’s revenue from Google is recorded under its Services segment, which also includes iCloud, Apple Music, apps, and warranties, highlighting the importance of these agreements to its overall business strategy.