Apple and Google Facing Major Upheaval: Exclusive Search Deal Under Fire

A groundbreaking ruling by a U.S. judge has shaken the lucrative agreement between Apple and Google. The search giant operated by Alphabet is accused of running an illegal monopoly. Currently, Google pays approximately $20 billion annually to Apple to be the default search engine on its devices. This translates to about 36% of search ad revenues generated through the Safari browser, according to analysts at Morgan Stanley. If the agreement is overturned, Apple could face a profit decline of 4-6%, experts estimate. The agreement runs at least until September 2026, with Apple having the right to extend it unilaterally by two years. Evercore ISI analysts point out that a court order will likely result in Google no longer being able to pay for the default placement or companies like Apple being required to actively prompt users to choose their search engine. Despite this news, Apple’s stock remained relatively flat, while Alphabet’s stock, after a previous decline of 4.5%, was barely changed. The legal battle could extend into 2026 and involve multiple legal stages. Should the agreement ultimately be terminated, Apple has several options available. The company could offer alternatives such as Microsoft Bing or a new search service backed by OpenAI. Analysts predict that Apple will now increasingly focus on AI-based search services. Hence, the OpenAI chatbot ChatGPT is expected to be available on Apple devices in the future, and talks with Google regarding the integration of the Gemini chatbot are already ongoing. Simultaneously, Apple is enhancing its voice assistant Siri with AI technology to handle complex tasks. While these efforts may bring little immediate profit in the coming years, they enable Apple to jump onto the new tech wave. Analyst Gadjo Sevilla from Emarketer emphasizes that although Apple may suffer a temporary setback in this situation, it also seizes the opportunity to shift more towards AI solutions.