Antitrust Battle Looms Over Apple, Google’s Lucrative Safari Deal

Apple’s deal with Google has become a focal point of the ongoing antitrust debate. The agreement, which makes Google’s search engine the default on Apple’s Safari browser, would earn Apple more than $20 billion in 2022 alone, according to court documents. That amount represents 36 percent of the advertising revenue generated by searches conducted on Safari, underscoring the financial importance of the partnership for both tech giants.

The financial implications are huge, according to MacRummers. For Apple, payments from Google have become a key revenue stream, contributing significantly to profits. The implications for Google are equally significant; a court ruling against Google could deprive the company of access to about 70 percent of iPhone searches. It would deal a major blow to Google’s mobile search ad revenue, which played a major role in its $207 billion in search ad revenue in 2023.

Related: EU to investigate Apple, Google’s compliance with new tech rules

In response to potential regulatory challenges, Google is actively trying to reduce its reliance on the Safari agreement. The company is encouraging iPhone users to switch from Safari to Google’s own apps and Chrome. Efforts to improve those apps have included integrating features like Lens image search and the Discover channel, which offers personalized content.

Despite heavy investments in TV and online ad campaigns in 2022 and 2023 that highlighted exclusive features available only in Google apps, Google’s success has been modest. Over the past five years, the share of iPhone searches conducted through Google apps has only grown from 25 percent to a low 30 percent.

To further strengthen its position, Google recently hired Robby Stein, a former Instagram and Yahoo executive, to lead initiatives aimed at increasing app adoption among iPhone users. Stein’s strategy includes exploring integrating generative AI to make Google’s mobile apps more engaging. Despite these efforts, Google faces a critical need to double down on searches performed outside of Safari, as growth in Google Apps and Chrome has stalled in the past year.

Source: MacRummers