Tech Giants Apple and Google Face New DOJ Appeal Over Siri and Search Deals

Recently, Apple and Google made headlines with their partnership to utilize Gemini for the next iteration of Siri. However, this collaboration is now facing potential challenges from antitrust regulators, putting the longstanding $20 billion search deal between the tech giants at risk. This uncertainty is also impacting the stability of the Gemini relationship.

The previous year saw a antitrust case initiated by the US Department of Justice against Google, which ultimately ended favorably for Apple. Despite the ruling by US District Court Judge Amit P. Mehta preventing Google from entering into exclusive search engine deals, the company was still permitted to pay Apple to remain as the default search engine. The issue arose from the perceived “de facto” exclusivity of the arrangement, prompting the courts to mandate the removal of any clauses hinting at exclusivity.

Prior to Judge Mehta’s decision, there were concerns that the deal could be completely blocked, posing a significant financial impact on Apple. Google’s payments account for a substantial portion (15-20%) of Apple’s Services revenue, amounting to $30 billion reported in the last quarter. The uncertainty surrounding this case may have also influenced the Gemini deal, with Apple hesitating to commit to another semi-exclusive agreement with Google while the search deal was in limbo.

Following the relief felt by analysts and investors after Judge Mehta’s ruling in September, a new development has emerged. The Department of Justice and a coalition of states have filed a notice of cross-appeal, signaling a request to review the remedies issued in September. This appeal, in response to Google’s own filing in January, indicates a potential revisitation of the final judgement. The case’s complexity extends beyond the Apple-Google deal, with Apple positioned as a bystander facing potential repercussions if the DOJ’s sanctions against Google are enforced.

The DOJ’s cross-appeal is primarily a response to Google’s appeal and seeks to address the more extreme remedies proposed. While Judge Mehta rejected the recommendation to break up Google by selling its Chrome browser, he did mandate the sharing of search data with competitors. This requirement, crucial to Google’s operations, may be a key point of contention in the appeals process. Meanwhile, the DOJ may push for a more significant divestiture of Chrome than the Apple search deal.

Although Gemini initially played a minor role in the case launched in 2024, its significance has evolved over time. The DOJ now considers Gemini within the context of Google’s search dominance, potentially providing an unfair advantage to its AI capabilities. While Judge Mehta’s ruling prohibits exclusive contracts for Google’s AI products like Gemini, concerns linger about the DOJ’s intentions to restrict any “default” placement for AI assistants. The Siri-Gemini collaboration may navigate these challenges, as Google’s involvement is limited to providing AI infrastructure for an Apple-operated system.

Given the slow pace of legal proceedings, a resolution is unlikely in the near future. Both parties have only submitted notices of intent to file appeals, indicating a prolonged legal process ahead. The intricate legal battles may escalate to the Supreme Court, prolonging the uncertainty surrounding Google’s presence on Apple devices and the future of Google’s role in Siri.

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