Apple gains on US ruling that spares search deal with Google

[NEW YORK] Apple shares gained in late trading after a US judge stopped short of barring its lucrative search arrangement with Google, a deal that has generated roughly US$20 billion in revenue a year for the iPhone maker.

Though judge Amit Mehta ruled in an antitrust case that Google cannot enter exclusive contracts for Internet search, deals that make the search provider a default option in Internet browsers are still allowed.

“Google is permitted to pay browser developers, like Apple,” he said in the decision. However, the partner company must promote other search engines, offer a different option in various operating systems or in privacy mode, and are allowed to make changes to the default search settings annually, Mehta wrote.

“Cutting off payments from Google almost certainly will impose substantial – in some cases, crippling – downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban,” he said.

Apple currently favours the Google search engine by giving it the best placement in the Safari search bar on computer and mobile devices. Users can opt to switch to Microsoft’s Bing, DuckDuckGo and other options. Apple also changed its iOS software two years ago to allow the use of a different search engine in private mode.

Apple shares climbed as much as 4.3 per cent to US$239.50 in extended trading. They had been down 8.3 per cent this year to the close. Google shares gained as well, climbing as much as 8.7 per cent.

Apple’s search partnership was a central piece of the US Department of Justice’s landmark case against Google. The ruling, delivered on Tuesday (Sep 2), also allows Google to avoid selling its popular Chrome web browser.

Mehta had ruled last year that Google illegally monopolised the markets for online search and search advertisements. He then held a three-week hearing in April to determine a fix. BLOOMBERG