Apple May Have to Learn to Live Without $20 Billion a Year From Google -- WSJ

By Aaron Tilley

The U.S. Department of Justice said Google should end its default search arrangement with Apple, endangering as much as $20 billion a year in highly profitable revenue for the iPhone maker.

Since 2003, Apple has set Google as the default search engine on its devices in exchange for billions of dollars a year. If upheld, the proposal would likely take years to go into effect, and analysts expect Apple to find new ways to make up for the lost revenue.

The company already has many options for charging partners for access to its vast user base, and artificial-intelligence partnerships may offer another opportunity. Apple Intelligence, its new system for integrating AI across its devices, is set up to allow users access to third-party systems.

OpenAI's ChatGPT service will be the first Apple Intelligence partner. In conversations with some AI companies, Apple has discussed taking a cut of subscription revenue for users who sign up for paid services through Apple Intelligence, The Wall Street Journal has previously reported.

Apple has also publicly acknowledged that it wants to integrate Google's ChatGPT competitor, called Gemini, into Apple Intelligence. The company has also held AI partnership talks with Meta, Anthropic and Perplexity.

The Justice Department's request was made Wednesday evening. It was one of a slew of remedies the agency proposed following its win this year in an antitrust case against Google, which is owned by Alphabet.

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(END) Dow Jones Newswires

November 21, 2024 04:40 ET (09:40 GMT)

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