Eddy Cue, Apple’s senior vice president of services, testified in a federal court that Google search volume on Apple products fell last month for the first time in 20 years. He attributed the decline to AI alternatives such as ChatGPT and Perplexity. Cue’s testimony came during an antitrust trial in Washington where US Judge Amit Mehta will determine how Google must address his ruling last year that it operates an illegal monopoly in online search.
The remarks caused Google’s market capitalization to drop by $140 billion since the close of trading on Tuesday. The court case revealed that Google pays Apple tens of billions of dollars annually in a revenue sharing agreement that sets Google’s search engine as the default on Apple’s Safari browser.
Google’s search monopoly challenge
Cue also mentioned that Apple plans to add other AI choices to the search engine options in the browser over the coming year. US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will only increase the tech giant’s online search dominance. Another option is for the judge to order an end to the payouts from Google to Apple and others for the default position on devices.
Cue stated this would significantly impact Apple’s ability to invest in new products and services. The testimony supported Google’s argument that the emergence of AI has started a new era in how people get information online, with its search engine now facing competition from AI chatbots. The judge’s decision is expected in August.