When it (regulatory) rains, it (regulatory) pours. That must be how Google is feeling today.
During the remedies trial in the DOJ’s search antitrust case against Google, Apple’s Eddy Cue testified that Apple has explored integrating AI search engines like OpenAI and Perplexity into Safari. Keep in mind, Google is currently Apple’s default search engine, an arrangement Google pays Apple $20 billion a year to maintain.
Shares of Google parent Alphabet dropped a lot (!) following the reports.
To make matters worse for Google—and to underscore why these AI moves might be necessary—Cue added that Google’s search traffic on Apple devices declined last month for the first time in over two decades, likely driven by more users turning to LLM-first search engines.
Why This Matters:
Obviously, this could fundamentally shift how Google operates in the search market. Losing default status on Apple devices – or at the very least having that status encroached on in some way – could curb its dominance and open the door for emerging players like OpenAI and Perplexity. It would also be a financial blow to both Big Tech giants: Google could lose a fairly critical user acquisition channel, and Apple would forfeit a $20 billion annual payday.
While Google does offer AI-powered search, it’s hard to ignore the rapid rise of companies like OpenAI and Perplexity, which are aggressively targeting Google’s market share. At the same time, trust in these tools is growing. The more people use them, the more they trust them, and, unfortunately for Google, a lot of this trust has been built with its challengers.
Experts React:
Chamber of Progress’ Vidushi Dyall has a strong thread on Cue’s testimony. By the way, her account is a must-follow for anyone tracking the search antitrust trial (or the adtech one, for that matter).
To be clear, Cue’s comments did seem a bit more measured than some headlines are reporting. See here:
Either way, here are some other notable reactions on X about the news:
Our Take:
In general, these types of moat-building platform deals between large companies feel both anticompetitive and antiquated, and they don’t seem likely to last, regardless of who’s in office.
At the same time, the idea of “platform neutrality” is compelling in theory, but in practice, the best user experience should win, no? If one option clearly delivers more value for users at that point in time, defaulting to it isn’t just practical, it’s customer-first, right? (Especially if they’re paying you $20 billion per year.) Ultimately, this is a tough line to walk.
