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A US federal judge set remedies in the Google search antitrust case that allow default search engine payments to continue. The court barred exclusive deals but did not order a breakup or a ban on Google’s payments to distribution partners, preserving the multibillion-dollar arrangement that makes Google the default in Safari on Apple devices.
Judge Amit Mehta also declined to force a sale of Chrome. Instead, the decision requires Google to share certain data with rivals to support competition. Apple benefits because the ruling lets Google keep paying for default status on iPhone, iPad, and Mac.
Analysts framed the outcome as a clear positive for Apple’s high-margin services mix. Wedbush called it a “monster win” that removes an overhang tied to a potential end of the Google deal. Apple stocks rose on the news, while Alphabet rallied more sharply.
Apple’s services margins run well above hardware margins, so stability in traffic-acquisition payments supports earnings quality. Industry estimates and prior disclosures indicate that the services' gross margins are above 70%, underscoring why investors focus on this line.
Apple’s earnings report also posted solid results with revenue reaching $94.0 billion, up 10% year over year. EPS also hit $1.57, up 12%, both June-quarter records. Services revenue set a new high, adding to the bull case as the company heads into its September product cycle.
The ruling trims a key tail risk, but investors should still monitor implementation. The court limited exclusivity and imposed data-sharing requirements, which could aid competitors over time. Any adjustments to commercial terms between Google and partners may also emerge through compliance phases.
Legal risk has not vanished. The Justice Department could appeal, and separate cases, especially those related to Google’s advertising technology, may continue. Policy shifts in the US and Europe also target mobile distribution and app economics, areas critical to Apple’s broader services strategy.
For now, Apple can model Services with the Google revenue-share intact, aligning with management’s recent assumptions. With a premium multiple already in place, future returns will likely hinge on sustained services growth, disciplined execution, and the evolution of regulatory remedies.
