By losing a major antitrust lawsuit on Monday, in which federal judge Amit Mehta ruled that the company is a monopolist and has violated U.S. antitrust laws to dominate the search engine market, up to a quarter of Google Search’s revenue and 15% of parent company Alphabet’s revenue is in jeopardy. Google Search, which is central to Google’s business, contributed $48.5 billion to the company’s total revenue of $84.7 billion in the second quarter.
Google’s dominance in search is largely maintained through distribution agreements with companies like Apple, Samsung, and Verizon. These deals make Google the default search engine on many devices and web browsers. Mehta noted that about 50% of all U.S. search queries come through these agreements, with a significant portion from Apple devices. If these deals are banned, as suggested by J.P. Morgan analyst Doug Anmuth, Google could lose a substantial portion of its search revenue, impacting Alphabet’s overall sales.
While the Department of Justice has yet to propose specific remedies, potential outcomes include banning distribution agreements or imposing monetary penalties. Analysts believe the legal proceedings could take months or even years, and immediate disruptions to Google’s operations are unlikely. Google’s stock price remained stable following the ruling, as investors had already reacted to the company’s recent earnings report, which highlighted significant AI expenditures and weak YouTube ad sales.
