Google faces DOJ scrutiny over $20 billion Apple search deal on Safari

Google, the undisputed leader in the search engine market, faces increasing scrutiny from the U.S. Department of Justice (DOJ) over its business practices. A pivotal aspect of this antitrust investigation centers on Google’s multi-billion dollar deal with Apple, which ensures Google remains the default search engine on Safari. As the DOJ examines the fairness of Google’s market dominance, the tech giant is strategically working to mitigate its reliance on Apple’s Safari by promoting its own apps, Google and Chrome, for searches on iPhones.

Google faces DOJ scrutiny over its multi-billion dollar deal with Apple for default search on Safari

Google’s agreement with Apple, which reportedly costs over $20 billion annually, secures Google’s position as the default search engine on iPhones. This deal, while lucrative for both companies, is seen by the DOJ as a barrier to competition in the search engine industry. Apple benefits from a revenue-sharing arrangement, receiving a cut of the advertising revenue generated from Google searches conducted via Safari. Although Apple is not a defendant in the DOJ lawsuit, its executives, including Eddy Cue, have been called to testify.

In anticipation of a potentially unfavorable ruling from the DOJ, Google has been actively encouraging iPhone users to switch from Safari to its Google and Chrome apps for their search needs. This initiative aims to reduce the financial burden of the revenue-sharing agreement and minimize regulatory risks.

Over the past five years, Google has managed to increase the share of searches conducted through its apps from 25% to the low 30s. Despite this progress, the growth rate stalled in late 2023, well short of Google’s ambitious target of 50% by 2030. The primary challenge lies in the fact that Safari comes pre-installed on all Apple devices, making it difficult to persuade users to switch.

To entice iPhone users, Google has highlighted exclusive features available only on its apps, such as Google Lens. There was also consideration of restricting the AI Overviews feature, which provides AI-generated responses to search queries, to only Google’s apps. However, this approach was ultimately deemed too user-unfriendly and was not implemented.

Earlier this year, Google brought in Robby Stein, a former executive at Instagram and Yahoo, to lead the effort to shift iPhone users away from Safari. Stein’s strategies included leveraging Google’s advanced AI technology to enhance the appeal of Google and Chrome apps.

The billions Google pays Apple each year significantly impact its bottom line. By successfully encouraging more users to switch to Google’s apps, the company could reduce these payments and lessen its vulnerability to regulatory challenges. However, the looming DOJ antitrust decision, expected within the next few months, remains a critical factor in determining the future of Google’s relationship with Apple and its dominance in the search engine market.

(via The Information)

About the Author

Asma is an editor at iThinkDifferent with a strong focus on social media, Apple news, streaming services, guides, mobile gaming, app reviews, and more. When not blogging, Asma loves to play with her cat, draw, and binge on Netflix shows.