Antitrust lawsuit threatens lucrative Apple-Google deal

Apple’s deal with Google to make Safari the default search engine is uncertain amid a looming antitrust lawsuit from the U.S. Department of Justice, information reports.

Apple’s deal with Google, which makes Google search the default on Apple’s Safari browser, has been a significant source of revenue. The deal is expected to bring Apple more than $20 billion in 2022, a sum derived from 36 percent of advertising revenue generated by Safari searches, court documents have revealed.

The deal has significant financial implications for both companies. For Apple, payments from Google are an important revenue stream as a significant portion of its profits. If the court rules against Google, it could lose access to about 70 percent of iPhone searches. That would have a significant impact on Google’s mobile search advertising revenue, which was the main source of $207 billion in search advertising revenue in 2023.

Google is working to reduce its reliance on contracts. The company is actively encouraging iPhone users to switch from Safari to its own apps, Google and Chrome. Google has invested heavily in improving its mobile apps with features like Lens image search and the Discover channel, which shows personalized content. In 2022 and 2023, Google has launched extensive advertising campaigns on TV and the web showcasing exclusive features available only in its apps. But over the past five years, Google has only managed to increase the percentage of iPhone searches conducted through its apps from 25 percent to a low of 30 percent.

Earlier this year, Google hired former Instagram and Yahoo executive Robby Stein to lead efforts to boost app adoption among iPhone users. Stein’s strategies include exploring integrating generative AI to make Google’s mobile apps more engaging. The company now wants to double the number of Google searches performed outside of Safari, even as searches within Google’s apps and Chrome have stagnated over the past year.

The change is particularly important for Google to mitigate the impact of a potential outcome of the U.S. Department of Justice’s antitrust lawsuit. A ruling against Google would also set a precedent for how Apple’s default settings and competitive practices are regulated.

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