Investing.com — The Division of Justice’s (DoJ) antitrust case towards Google (NASDAQ:) may have vital implications for Appl, regardless of the tech large not being immediately concerned, Barclays (LON:) analysts stated in a current be aware.
On the heart of the difficulty is Google’s Visitors Acquisition Price (TAC), which represents funds to platforms like Apple (NASDAQ:) for driving site visitors to Google’s search and promoting providers.
Based on Barclays, Google’s TAC funds made up about 70% of Apple’s promoting income in FY24 and should have contributed round 15% to Apple’s working earnings.
“The treatment of the Google TAC is at the forefront in the decision,” Barclays famous, underscoring its significance to Apple’s monetary mannequin.
The case is progressing, with preliminary treatments issued final week and Google set to reply in December.
A trial is anticipated in April 2025, with a possible choice by July 2025, in keeping with Barclays.
Nevertheless, the financial institution anticipates “several layers of appeals” that might lengthen the method for years.
If the DoJ case ends in restrictions on Google’s TAC funds, Apple may face fast income pressures.
Barclays highlighted that Google at the moment pays Apple round 36% of income generated by way of the Safari toolbar in change for being the default search engine.
Regardless of the potential setback, the financial institution believes Apple could have pathways to offset any income loss.
Barclays famous that Apple may “back fill lost revenues with its own ad stack over time” and even develop its personal search engine.
Whereas the case continues to be within the early levels, its decision may materially impression Apple’s profitable promoting enterprise, notably its reliance on TAC funds, Barclays warned.
