Apple wants its $20 bn, and is willing to throw Google under the bus to keep it

Google lost the trial in August, when judge Amit Mehta of the U.S. District Court for the District of Columbia decided that Google had a monopoly in U.S. search engines, and that it illegally used that position to foreclose competition.

The two-week trial to determine what penalties Google will face just concluded, and on Friday evening there were a flood of “friend of the court” briefs from third parties who wanted to express their opinion in the results.

Apple filed one of those briefs, and its self-interest is evident in its pages.

One of the remedies proposed by the Department of Justice and the states that are plaintiffs is that Google should be prohibited from providing Apple with “anything of value” for search placement, and this could zero out Google’s payment if the court decides to enforce that to its fullest.

Apple wants to keep that big payment, which amounted to 18% of Apple’s pretax earnings in 2022. To begin with, it argued that Google Search is weakened, and it is seeing real competition for the first time in many years.

“Much has changed since the liability trial,” the brief reads. “For the first time, Apple has recently seen a decline in the number of queries year-over-year to Google from the Safari web browser. Apple believes this is driven by consumers increasingly shifting toward new entrants—products like ChatGPT, Claude, and Perplexity, among others—to search for and access information online.”

“True competition in the market is not far away.”

When Apple Senior Vice President of Services Eddy Cue gave testimony to the same effect on Wednesday, Alphabet stock dropped 7.3%.

But it didn’t stop there. Apple also tried to draw the judge’s attention from this penalty toward one of the harshest of the remedy proposals: forcing Google to share its search and ad indexes with competitors, including the AI search engines. Right now, the AI competition is able to succeed with much smaller indexes than Google’s, and access to more data would make them that much better, and further weaken Google’s position.

Apple argued that if the court is really interested in fostering competition in the U.S. search engine market, “sharing Google Search index data with new AI companies would—taken in conjunction with their revolutionary large language models—help accelerate their ability to compete.”

Apple is not going to back down. As we have already seen in the European Union and in its trial with Epic Games, Apple will always push the envelope to maximize its own interests.

Even if it hurts Google in the process.

Write to Adam Levine at [email protected]