JPMorgan Warns of Potential 10% EPS Hit for Apple in DOJ-Google Case

JPMorgan analysts believe an impending antitrust ruling on Google could impact Apple's bottom line, with potential implications for iPhone maker's traffic acquisition fees. The analysts estimate Apple receives $28 bln from Google, with $12.5 bln coming from US-based customers. If the DOJ's remedy is implemented, JPMorgan sees a 10% EPS impact, while Google's remedies could maintain the status quo. A middle ground could result in a low-to-single digit percentage impact on EPS.

An impending antitrust ruling on Google could have significant implications for Apple's financial performance, according to JPMorgan Chase analysts. The ruling, expected to be announced by the judge early this month, pertains to Google's search business and potential changes to correct antitrust concerns.

Last year, a U.S. judge ruled that Google had spent billions of dollars to illegally create a monopoly, making it the world's dominant search engine. This decision opened the door for several potential fixes, including the breakup of Google's parent company, Alphabet, through the sale of its Chrome browser. Such a move could fundamentally alter the online advertising landscape, which has long been a cornerstone of Google's operations.

For Apple, the sale of Chrome could prevent Google from continuing to pay the Cupertino handset manufacturer to be its default search option. JPMorgan analysts estimate that Apple receives approximately $28 billion in traffic acquisition fees from Google, with around $12.5 billion coming from U.S.-based customers.

The analysts flagged two potential remedies presented by the U.S. Department of Justice (DOJ) and Google. The DOJ's remedy would bar Google from making payments for distribution, which JPMorgan described as the "worst case" scenario for Apple, potentially denting its earnings per share (EPS) by around 10%. Conversely, Google's remedies would largely maintain the current status quo, keeping Apple's earnings intact.

However, the analysts also see a third option: a middle ground where Google can make payments to Apple only for consumers organically choosing Google as their default search engine within Apple's Search Access Points. This scenario would hit Apple's per-share income in the low-to-single digit percentage range, according to the analysts.

Legal wrangling over the judge's ruling has been ongoing for much of the past year, and it could be prolonged further by appeals to higher courts. The ruling's outcome could significantly impact Apple's financials, particularly if the DOJ's remedy is implemented.

References:
[1] https://www.investing.com/news/stock-market-news/jpmorgan-breaks-down-how-the-dojgoogle-case-could-impact-apples-bottom-line-4160369
[2] https://www.reuters.com/legal/litigation/us-appeals-court-agrees-pause-google-app-store-reform-order-now-2025-08-01/
[3] https://finance.yahoo.com/news/jpmorgan-breaks-down-doj-google-110501945.html