Google’s “Code Red” 📱

Google’s “Code Red”

“Code red”

That’s how Google has internally described yesterday’s Justice Department antitrust lawsuit against the company, which claims Google misused its power to eliminate competition on Apple’s products.

It has been public information that Google, and Apple have a partnership for Google to be the default search engine on iPhones. In 2018, the CEOs of both companies met to discuss how to drive search engine revenue growth. The public is just now learning more about how important this relationship is for both Apple and Google.

Google pays Apple a significant amount for the exclusive rights to be the iPhones default search engine. The deal is worth so much that the lawsuit projects it accounts for nearly 20% of Apple’s annual profit. The projections from the lawsuit would mean that the roughly $11 billion paid annually to Apple are about a third of Alphabet’s annual profits.

With the agreement being such an important part of both companies, expect a big challenge to come from the tech giants. Investors seem confident in the two companies despite the internal “code red” description because both companies closed on the day.

The results of this suit are a long way away, but it will be so important to monitor because of the precedent it could set. A defeat for Apple and Alphabet could be the catalyst for a Silicon Valley shakeup, while a victory will further solidify their power as two of the most valuable companies in the world.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.


More Posts

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying, holding or investing in digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC.

The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community.The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results.Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such.Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.