The most powerful alliance from the Silicon Valley has just become stronger

Eddy CUE deserves a raise.

As a director supervising the Apple Service Department, it is very encouraged to protect tens of billions of dollars a year that Google pays for the default search engine at Safari. “I lost a lot of sleep thinking about it,” he said from the position of a witness during the Google antitrust process at the beginning of this year.

Fortunately for CUE, it seems that his court testimonies had a significant impact on judge Amit Mehta, who said this week that failure to perform Google’s obligations on Apple and others may be continued. You can see Cue’s arguments for Trial Mirorred in the Mehta: Apple SVP said that “crazy” would be to punish the iPhone manufacturer, limiting Google’s ability to pay for the default status and that AI’s growth is still being processed by the search market. Trying to disregard the importance of the Apple and Google agreement, Cue went so far that Google’s search in Safari fell for the first time, which temporarily caused a decrease in the price of Google share.

These are the exact arguments that Mehta finally said in his ruling. He decided that the default payments still “shape the market of general search services in favor of Google”, but their ban would have “mutilating” effects below the recipients of these payments. One of the specific effects he quoted was “fewer products and less innovation of products from Apple”, one of the richest companies in the world. (Google payments to Apple are estimated to constitute about 15% of the annual profit).

Mehta quoted the raise in AI generative companies, such as OpenAI and embarrassment as proof that there is finally competition on the search market. “The money flows into this space and how quickly it arrived, it is amazing,” he wrote. “These new realities give the court hope that Google will simply not pierce distribution competitors if excellent products appear.”

As Mehta knows well, the reality of Google and Apple’s financial relations is much more complicated. Google has historically paid Apple the percentage of advertising revenues that he earns via safari. This adapts encouragement between the two most powerful companies on Earth, both of which were shared in this agreement for most of the two decades.

It is probably not a coincidence that immediately after releasing the Mehta decision, Messages burst The fact that Apple is now working with Google to potentially have Gemini supply in the AI ​​search engine, which it develops for Siri. The management of Apple has been discussing Gemini’s integration with iOS for over a year, but has refrained for obvious optical reasons. The US government has just given them permission to continue.

“This result is the launch of the status quo, and the status quo was very beneficial for both Google and Apple,” wrote a company dealing with technological research and media Moffettnathanson in a note for its clients this week. “We do not suggest that the future of searching or devices is now free from a competitive threat, but this decision allows us to go ahead of us on their conditions, not through destructive and harmful judgment.”

The Apple and Google search agreement should be withdrawn, and maybe it will still be if Apple finally gets its turn with an antitrust headlight. For years I talked to many potential search rivals on Google, who indicated the contract as a key factor in stuffy competition. It can be argued that no contract had a major impact on the Silicon Valley for a long time. The most sinister aspect is that it enabled two companies that already control, as most people gain access to the Internet, become richer and more powerful together.

Relations allow for continuation, prepares the Apple and Google scene to expand its common dominance for the age of artificial intelligence. Apple is behind artificial intelligence, but remains a powerful source of Gemini distribution via iPhones, iPads and Mac. Due to the fact that search payments from Google are still appearing, why should Apple get a startup such as Mistral or embarrassment to play catching up? He is already receiving remuneration for working with one of the leading AI companies in the world, and now he has Carte Blanche to develop deeper ties.

This week, the ruling also concludes an OPPLEI distribution agreement with Apple to ChatgPT in a tough place. I am sure that Apple likes to have optionality, but this will not threaten Google’s relationship with the money from continuing the search. Opeli does not have an advertising company yet, from which you can limit competitive competitive. Despite what Mehta thinks, it is strenuous to imagine that any other company can exceed the default Google payments using an excellent product (sorry, Microsoft). All this leaves Google and Apple where they were all the time: two de facto monoples feeding at the expense of all others.

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