Apple admits there is currently no alternative to Google search

Monday’s landmark US antitrust ruling in the US threatens one of the longest-running partnerships in technology and could cost Apple billions of dollars. At the same time, the company said that there is no significant alternative to the Google search engine.

Image source: Maksym Mazur/Unsplash

At the center of the scandal was the exclusive agreement between Apple and Google that has been in place since 2002, under which the Google Search search engine is the default search engine on all Apple devices for users around the world, which brought both companies billions of dollars in revenue. Google paid Apple, as a partner, a portion of the revenue from its search advertising. In 2022 alone, Google paid Apple $20 billion, the Financial Times reports, citing facts cited in the court decision.

District Judge Amit Mehta found Google guilty of violating antitrust laws, calling into question the partnership agreement to install Google as the primary search engine on Apple devices. Analysts at JPMorgan predict several “uncomfortable alternatives” for Apple, including entering into revenue-sharing agreements with alternative search engines such as Microsoft’s Bing, which “would be less profitable for Apple given Google’s superior ad monetization.”

Justice Mehta also mentioned whether Apple could create its own search engine. However, according to an internal Apple study in 2018, even if the company retained 80% of searches, it would still lose $12 billion in revenue in the first five years after splitting from Google. In addition, former Google executive John Giannandrea, who now works for Apple, said that “there is a significant risk that [Apple] could end up being a money-losing search engine that cannot meet user needs the way Google does.” .

Google intends to appeal the court’s decision, although analysts believe that the chances of a positive review are small. Depending on the final verdict regarding Google’s antitrust violations, Apple could be “forced to agree to a much less favorable agreement with Microsoft [search engine Bing] or could be prevented from setting default search engines at all,” according to independent analyst Eric Seufert ( Eric Seufert).

Interestingly, Apple is not the only company that could suffer greatly. According to court documents, Google paid Mozilla more than $400 million in 2021 to set the default search engine in its browser, representing about 80% of Mozilla’s operating budget.

It is worth noting that in general the search market is undergoing a certain transformation with the advent of generative artificial intelligence. Apple has already announced a partnership with OpenAI that will allow users to submit search queries to ChatGPT. In addition, the company is working to improve its Siri voice assistant using its own technologies.

Despite these changes, traditional search is showing growth. Search advertising spending in the United States is projected to increase at an average rate of 10% annually, reaching $184 billion by 2028.

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