Apple’s lucrative deal with Google, worth $20 billion annually, could be jeopardised after a US judge ruled that Google operates an illegal monopoly. The agreement makes Google’s search engine the default on Apple devices, contributing significantly to Apple’s profits. Analysts suggest that Google might have to terminate this deal to avoid antitrust actions, which could result in a 4-6% profit loss for Apple.
The current pact extends until September 2026, with Apple having the option to prolong it for another two years. However, the judge might rule that Google must stop paying for default placement or mandate that Apple offer users a choice of search engines. Apple’s shares remained flat amid this uncertainty, while Alphabet saw minimal change after a recent decline.
Legal proceedings related to this case could be lengthy, potentially dragging into 2026 with appeals. Meanwhile, Apple might explore alternatives, such as integrating Microsoft Bing or developing a new search product with OpenAI. The company has already announced plans to incorporate OpenAI’s ChatGPT and is negotiating with Google to add the Gemini chatbot.
Apple is also enhancing Siri with AI technology to improve its functionality, aiming to capitalise on new AI advancements despite the potential short-term financial impact of losing the Google deal. This shift towards AI-powered search services could help Apple navigate regulatory scrutiny and open new revenue streams.
A US District Judge ruled that Alphabet’s Google has illegally monopolised web search while criticising the company for potentially destroying evidence. Judge Amit Mehta highlighted Google’s alleged failure to preserve internal communications and misuse of legal protections but chose not to sanction the company formally. The US Justice Department accused Google of systematically deleting employee messages and abusing attorney-client privilege, though Mehta noted these issues were not pivotal in determining Google’s antitrust violations.
Google had a policy of automatically deleting employee chat messages after 24 hours unless manually preserved, which it altered last year to improve record-keeping. Mehta also criticised Google’s ‘communicate with care’ initiative, where employees would involve lawyers in messages to shield them under attorney-client privilege.
Why does this matter?
The evidence-handling issue has been contentious in other cases against Google, including a lawsuit by Epic Games, where a federal judge previously ruled that Google willfully failed to preserve relevant chat records. The matter is also part of an upcoming Justice Department lawsuit concerning Google’s digital advertising practices.
Despite avoiding sanctions, Mehta warned that companies relying on employees to preserve evidence risk future penalties. Google’s decision not to comment on the ruling suggests ongoing legal challenges as it plans to appeal the court’s decision on its antitrust conduct.
A US judge ruled on Monday that Google violated antitrust law by spending billions to establish an illegal monopoly as the world’s default search engine. Such a landmark decision marks a significant victory for federal authorities challenging Big Tech’s market dominance. The ruling sets the stage for a second trial to determine potential remedies, including breaking up Google’s parent Alphabet, which would significantly alter the online advertising landscape.
Judge Amit Mehta of Washington, D.C., concluded that Google is a monopolist and has maintained its monopoly through unlawful means. Google controls 90% of the online search market and 95% of smartphone searches. The ‘remedy’ phase could be prolonged, followed by possible appeals that might extend the legal battle into the next few years.
Alphabet’s shares fell by 4.5% on Monday amid a broader decline in tech stocks due to recession fears. Google, which plans to appeal the ruling, stated that the decision acknowledges it offers the best search engine but argues it shouldn’t be restricted from making it easily accessible. US Attorney General Merrick Garland hailed the ruling as a historic win for the American people, emphasising that no company is above the law.
The ruling also highlighted that Google paid $26.3 billion in 2021 to secure its search engine’s default status on smartphones and browsers, maintaining its dominant market share. The legal case, filed by the Trump administration, is the first big decision in a series of antitrust cases against Big Tech, including ongoing lawsuits against Meta, Amazon, and Apple.
Senator Amy Klobuchar noted that the case’s progression across administrations demonstrates strong bipartisan support for antitrust enforcement. She praised the ruling as a significant victory for competition, reinforcing that antitrust enforcement remains robust in addressing monopolistic practices.
After facing criticism for its portrayal of AI, Google has withdrawn its controversial ad from the Olympics. The ad featured a father using Google’s Gemini AI chatbot to help his daughter write a fan letter to Olympic athlete Sydney McLaughlin-Levrone, which many viewers felt undermined the child’s creativity by replacing it with AI-generated text.
Initially, Google defended the ad, asserting that it demonstrated how Gemini could provide a helpful starting point for writing. However, following widespread feedback, the company decided to pull the ad from its rotation. That move highlights ongoing concerns about AI potentially displacing creative jobs, similar to the backlash faced by Apple earlier this year for a similar ad.
The ad’s removal marks a notable misstep for Google, which aims to position Gemini as a key competitor to OpenAI’s ChatGPT and integrate AI across its products. The incident also underscores broader fears about AI’s impact on creative professions.
Startup Character.AI has entered into a non-exclusive licensing agreement with Google, allowing the tech giant to use its large language model technology. As part of the deal, Character.AI co-founders Noam Shazeer and Daniel De Freitas, former Google employees, will rejoin Google, specifically its DeepMind research team.
Character.AI will receive additional funding from Google, though the exact amount has not been disclosed. Dominic Perella, the startup’s general counsel, will serve as interim CEO. The agreement follows similar moves by Microsoft and Amazon, who have also acquired AI talent from startups to strengthen their AI capabilities.
The deal comes amid regulatory scrutiny in the US and Europe over how major tech companies consolidate AI resources. Character.AI previously raised $193 million in venture capital and discussed securing more funding from Google.
Google is rolling out new AI-driven features for Chrome’s desktop version, powered by its Gemini technology. These updates include the introduction of Google Lens for desktop, accessible from the address bar and menu, allowing users to select parts of a web page or objects in images to ask questions and receive search results. The feature aims to enhance the user experience by enabling more interactive and visual searches.
Another addition is the Tab Compare feature, which is designed to simplify online shopping. It provides an AI-generated summary of similar items from different tabs, presenting product specifications, features, prices, and ratings in one consolidated view. This tool will help users make more informed purchasing decisions by comparing items across multiple pages.
Google also improves search functionality by integrating natural language queries for browsing history. Users can search their history using everyday language, making it easier to find previously visited pages. For example, users can ask, ‘What was that ice cream shop I looked at last week?’ and get relevant results based on the URL, title, and content of the pages.
These updates reflect Google’s ongoing efforts to integrate AI into its services, following previous enhancements such as a writing assistant, tab organiser, and theme creator introduced earlier this year. By leveraging AI, Google aims to provide users with a more intuitive and efficient browsing experience.
Google is taking significant steps to address the problem of non-consensual sexually explicit fake content, often referred to as ‘deepfakes,’ that has been increasingly distributed online. Recognising the distress this can cause, Google has updated its policies and systems to help affected individuals more effectively. These updates include easier removal processes for such content from Search and improvements to Google’s ranking systems to prevent this harmful material from appearing prominently in search results.
People have long been able to request the removal of non-consensual explicit imagery from Google Search, but the new changes make this process more accessible. Once a request is successfully made, Google’s systems will also aim to filter out all explicit results related to similar searches. Additionally, if an image is removed under these policies, Google will scan for and remove any duplicates, providing greater peace of mind for those worried about future appearances of the same content.
In tandem with these removal process enhancements, Google is also refining its ranking systems to demote explicit fake content. That includes lowering the ranking of such content for searches that may inadvertently lead to it and promoting high-quality, non-explicit content instead. These changes have already shown promising results, with exposure to explicit image results on certain queries reduced by over 70%. By distinguishing between real and fake explicit content, Google aims to surface legitimate information better while minimising harmful content.
Google acknowledges that more work is needed to tackle this issue comprehensively. The company is committed to ongoing improvements and industry-wide partnerships to address the broader societal challenges of non-consensual explicit fake content. These efforts reflect Google’s dedication to protecting individuals and maintaining the integrity of its search results.
Russia’s communications regulator, Roskomnadzor, has fined Alphabet’s Google and TikTok for not complying with orders to remove banned content. The Tagansky district court in Moscow imposed a 5 million rouble ($58,038) fine on Google and a 4 million rouble fine on TikTok. These penalties were issued because both platforms failed to identify content similar to what was previously ordered to be removed.
This is part of a broader effort by Russia over the past several years to enforce the removal of content it considers illegal from foreign technology platforms. Although relatively small, the fines have been persistent, reflecting Russia’s ongoing scrutiny and regulation of online content.
Moscow has been particularly critical of Google, especially for taking down YouTube channels associated with Russian media and public figures. Neither Google nor TikTok immediately responded to requests for comment on the fines.
Apple Inc has joined US President Joe Biden’s voluntary commitments to govern artificial intelligence, aimed at preventing the misuse of AI technology. The White House announced on Friday that Apple is now part of a group of 15 firms that have committed to ensuring AI’s power is not used for harmful purposes. The original commitments, introduced in July 2023, were initially signed by companies such as Google and Microsoft’s partner OpenAI.
In September, additional firms including Adobe, IBM, and Nvidia also pledged their support. This initiative is part of a broader effort by the Biden administration to promote responsible AI innovation by assembling an AI expert team, urging tech CEOs to adopt measures that prevent AI from being used destructively.
Apple’s participation comes amid its own challenges with AI, as the company recently delayed AI features for iOS and iPadOS. This commitment underscores the importance of a unified approach among major tech companies to address the ethical and safety concerns surrounding AI.
Britain’s antitrust watchdog is examining Google-parent Alphabet’s partnership with AI startup Anthropic to assess its impact on market competition. The scrutiny comes amid growing global concerns about the influence of major tech companies on the AI industry following the AI boom sparked by Microsoft-backed OpenAI’s release of ChatGPT.
Regulators are scrutinising deals between big tech giants and AI startups, including Microsoft’s collaborations with OpenAI, Inflection AI, and Mistral AI, as well as Alphabet’s investments in companies like Anthropic and Cohere. Anthropic’s AI models, developed by former OpenAI executives Dario and Daniela Amodei, compete with OpenAI’s GPT series.
Last week, the UK’s Competition and Markets Authority (CMA) joined forces with US and the EU regulators to ensure fair competition in the AI sector. The CMA is now inviting public comments on the Alphabet-Anthropic partnership until 13 August before deciding whether to initiate a formal investigation. The CMA’s decision will be based on feedback during this initial consultation.
