Eddy Cue, the executive in charge of Apple’s services division, has expressed significant concern over Google’s default search engine status in Safari, especially in light of substantial payments Google makes to Apple estimated to account for about 15% of its annual profit. During Google’s recent antitrust trial, Cue mentioned the potential consequences of restricting these payments, arguing it would be detrimental not only to Apple but also to innovation in the tech sector.
Following Cue’s testimony, Judge Amit Mehta ruled that Google’s payments to Apple and other companies can continue. Mehta acknowledged that such payments benefit Google by shaping the market for search services but suggested that banning them would have harmful downstream effects, including reduced product innovation from Apple. Cue positioned the current dynamics between Apple and Google as part of an evolving search landscape, noting a decline in Google searches via Safari, which briefly impacted Google’s stock price.
The judge cited emerging competition from generative AI companies like OpenAI and Perplexity as indications that the search market is changing. Moreover, Mehta’s remarks indicate a belief that these new entrants might limit Google’s ability to dominate if superior products arise. Meanwhile, it was reported that Apple is discussing a potential partnership with Google to integrate Google’s AI technology into its own search engine for Siri, a collaboration that had been in talks for over a year.
The financial relationship between Apple and Google is underscored by Google’s historical practice of compensating Apple based on ad revenue generated from Safari. This enduring collaboration raises questions about the implications for competition in the search engine market, particularly as both companies prepare to extend their influence in the age of AI. Concerns remain about whether this partnership will continue to hinder other potential competitors in the space.
Source: https://www.theverge.com/command-line-newsletter/773260/google-apple-search-deal-money-ai