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America's trustbusters just delivered a one-two punch in their big battle with Google after a long-awaited decision in a four-year case raised the stakes for another tech giant: Apple.
On Monday, a federal judge in Washington dealt a blow to Google after ruling that multi-billion-dollar annual payments to make its search engine the default on third-party devices — Apple's devices being the most prominent — violated antitrust laws.
Of course, this is bad news for Google, which, as my colleague Hugh Langley notes, could lose about $30 billion in search revenue if it eventually loses the privilege of being the premier search portal on Apple devices.
How bad is it for Apple? In theory, pretty bad.
For one, Apple's deal with Google, first struck in the 2000s, has proven highly lucrative. Court filings disclosed this year showed that the deal generated $20 billion for Apple in 2022, so the possibility of losing a chunk of that is unfavorable.
Apple would also be pushed to give its users alternatives to a product that's become synonymous with search for almost three decades. That would be tough for Apple, which wants its customers to think they're getting a premium offering.
In reality, however, Apple may not have to worry too much if it does have to reduce its reliance on Google for search on its devices. It's got artificial intelligence plans to fall back on.
Apple
When Apple CEO Tim Cook unveiled Apple Intelligence at the company's Worldwide Developers Conference in June, it offered a glimpse into a future where AI could solve many of the problems users have historically turned to search for.
As Apple put it, its generative AI plans have been built to serve as a "personal intelligence system" for iPhone, iPad, and Mac users by combining "the power of generative models with personal context to deliver intelligence that's incredibly useful and relevant."
In other words, Apple hopes that AI can intelligently answer queries and support user needs by understanding what actually matters to users.
Part of Apple Intelligence also involves a revamped Siri, Apple's chatbot that users can supercharge by offering permission to connect to OpenAI's industry-leading technology, ChatGPT.
Though Siri has been a weak spot for Apple over the years, the company hopes that "richer language-understanding capabilities" capable of delivering "more natural, more contextually relevant, and more personal responses" will make it as useful as search.
Apple isn't alone in this thinking. Across Silicon Valley, those building AI models have been busy presenting a future in which chatbots will serve as "agents" that meet users' needs. The ability to address search queries should be a principal function of these AI agents.
It's why when ChatGPT first emerged, Google was reported to have issued a "code red." The idea that their powerful search engine could lose traffic to a generative AI chatbot that seemingly had the answers to all the things they'd normally type into Google was clearly a huge worry.
Of course, it's not clear what Apple's future relationship with Google will look like just yet. Monday's ruling did not include any remedies.
It's unlikely to find a deal as lucrative as the one it got with Google on search anytime soon, either. ChatGPT maker OpenAI is not paying Apple to partner on AI.
Still, Apple's bet on AI gives it a chance to present consumers with an alternative way to search the internet. It'll hope they find it as useful as Google.
