Your next iPhone might be pricier after the Google antitrust trial: 'Google has essentially been subsidizing the cost of devices'

As the 10-week trial probing Google’s business practices nears its midway point, it’s still too early to tell if U.S. District Judge Amit Mehta will side with the Justice Department and try to handcuff one of the world’s most dominant tech companies.

If Mehta rules that Google has been running an illegal monopoly in search, the punishment could open up new online avenues for consumers and businesses to explore in pursuit of information, entertainment and commerce.

“The judge can compel Google to open the floodgates so more startups and third-party competitors can put greater competitive pressure on Google, which will create higher quality online services,” said Luther Lowe, senior vice president of public policy at Yelp. The online business review site has been one of Google’s harshest critics while spending more than a decade railing against a strategy that favors its own services in search results.

Google’s search engine earned its huge market share by almost instantaneously presenting people with helpful information culled from the billions of websites that have been indexed since former Stanford University graduate students Larry Page and Sergey Brin developed the technology during the late 1990s.

In addition to its technological wizardry, Google also pays billions of dollars each year to ensure its search engine is the default choice for answering queries entered in the world’s most popular smartphones and web browsers.

These agreements don’t preclude users from switching to a different search engine in their settings, but it’s a tedious process that few people bother to navigate. This reality is why Google is willing to pay so much for the privileged position, according to the Justice Department.

Google’s payments for preeminent search placement — including an estimated $15 billion to $20 billion per year to Apple alone — are at the head of the Justice Department’s case, making it probable the judge would prohibit them if he rules against Google.

Should that happen, experts believe the most likely remedy in the U.S. would be a requirement for smartphones and web browsers to display a palette of different search engines during the setup process. That’s something already being done in Europe, where all indications, so far, are that most people are still opting for Google.

That could be because they believe Google truly is the best search engine — as Google argues in their defense — or they just trust the brand more than rival options such as Microsoft’s Bing or the privacy-focused DuckDuckGo.

Microsoft CEO Satya Nadella asserted Google has an almost hypnotic hold on users while testifying earlier this month during the trial.

“You get up in the morning, you brush your teeth and you search on Google,” Nadella said. He then added that the only way to break the habit is by changing the default choice.

As long as a ruling doesn’t exclude Google’s rivals from paying to be the automatic search engine on smartphones and web browsers, Microsoft could buy the default position for Bing — an opportunity Nadella indicated he would seize.

“There’s defaults — the only thing that matter in terms of changing search behavior,” Nadella testified.

Florian Schaub, associate professor of information at the University of Michigan, believes the fairest outcome in the trial would an across-the-board ban on all default agreements between two companies.

“The current environment is being shaped by an architecture that’s designed by the big companies that control the space,” Schaub said. “What the government can do is inject some neutralism into this and give consumers some actual choices. If people still choose to use Google, that is at least a consumer choice, which would better than having people stick to a default because they are conditioned to that default.”

In his testimony during the trial, Apple executive Eddy Cue said the company has embraced Google as the preferred search engine on the iPhone and other products because it provides the best experience for its customers. That stance has raised speculation that if Apple is blocked from using Google as the default search engine on the iPhone, it might flex its muscle as the world’s richest company to develop its own search technology.

However, a blanket ban on default search agreements that have been highly profitable for Apple and other companies such as wireless provider Verizon could trigger unintended consequences, such as raising prices on other popular products.

“If Google is no longer paying big bucks to Apple and other companies, they might raise the prices for their devices,” said David Olson, an associate professor for the Boston College Law School who is following the antitrust trial. “I don’t think they will be big, but we could see some price increases because Google has essentially been subsidizing the cost of devices like the iPhone.”

Another offshoot of a ban on default search agreements is that Google still could have a dominant advantage in search if people continue to proactively choose it and the company would have billions of dollars more to spend in other areas that it once devoted to deals that it really didn’t need at all.

“Google must think they getting a great benefit from those default agreements, but maybe they’re really not worth that much,” Olson said. “Maybe their cost/benefit analysis is off and they will wind up more money and just as much dominance. That would be ironic.”

Although the trial is focused on Google’s search engine, a government victory could have more sweeping consequences across the technology industry if Mehta decided all default settings are anti-competitive and outlaws all defaults in the settings.

“If one of the outcomes of the trial is that there needs to be more neutral choices, it wouldn’t just affect Google on Android phones, it could also affect Apple and the iPhone,” Schaub said. “Does it mean Google phones might have to offer (Apple’s virtual assistant) Siri as an alternative to the Google Assistant? Or would Apple devices have to offer Google Assistant?”

A decision like that would open a crack in the digital wall that Apple has built around the iPhone to give its own software and certain pet products such as Siri exclusive access to the device’s more than 1 billion users, setting the stage for another potential legal battle.