Stock

The Wall Road Journal: Google's unique search contract with Apple needs to be the main focus of the antitrust proceedings

The scope of the Google-Apple deal has long been a mystery among analysts.

AFP / Getty Images

Google called the scenario "Code Red" because of the strong prospect of losing the lucrative search engine pipeline from Apple Inc.'s iPhone.

Now that option is officially on the table.

Google's partnership with Apple is at the center of the U.S. Department of Justice's antitrust lawsuit alleging that Alphabet Inc.
TogetL,
+ 1.38%

Aco,
+ 1.38%
The unit abused its power in an anticompetitive manner and potentially threatened a huge source of income for both tech giants.

Read: Following indictments against Google, the antitrust changes roadmap contains many potential routes

It has long been known that Google relies on search queries from Apple
AAPL,
+ 1.31%
popular phone range. Google's flagship search engine is the preset default in Apple's Safari phone browser. When consumers enter a term on their phone, they are automatically fed Google search results and related advertising.

What is new is how central it is for both companies and for antitrust law. While the government was close to asking for specific remedial action on Tuesday, the importance of the Apple ruling in the lawsuit leaves little doubt that the Justice Department will attempt to stand up for it.

See also: Opinion: Google Investors: Not Sure What To Do About Antitrust Fees? Well, better get used to it

While Google and Apple don't know exactly how much their business is worth, the lawsuit suggests it accounts for between 15% and 20% of Apple's annual profits.

An expanded version of this report is posted on WSJ.com.

Also popular on WSJ.com:

iPhone 12 and iPhone 12 Pro test: The best iPhones – but not for the 5G.

Volunteers to be infected with coronavirus in UK vaccine effectiveness studies

Related Articles