A sign is seen on one of Google’s buildings at its Mountain View, California, campus on September 24, 2019. (AP Photo/Jeff Chiu, File)
In a major blow to tech giant Google, its parent company Alphabet saw its stock value plummet by more than 8% on Wednesday. The sharp fall came after surprising courtroom testimony from Apple’s senior vice president of services, Eddy Cue. Speaking at a federal antitrust trial in Washington, Cue revealed that for the first time in over 20 years, Google’s search traffic on Apple devices had declined.
The drop, Cue said, happened just last month and was linked to growing user interest in AI-powered alternatives like ChatGPT and Perplexity. The statement sent shockwaves through Wall Street, resulting in a staggering US$170 billion loss in Alphabet’s market value within a single day.
The timing of this revelation is significant. It came during a landmark antitrust case where the U.S. government is seeking solutions after Google was found to be illegally maintaining a monopoly over internet search. The trial, which began in 2020, has put a spotlight on Google’s longstanding deal with Apple — a deal that involves paying billions annually to remain the default search engine on Apple’s Safari browser and devices.
Cue’s suggestion that Apple may soon offer users other AI-based search options by default added more tension to the courtroom drama. This raised fears among investors that Google’s main source of income — its massive ad business built on search traffic — could take a serious hit if users start turning to other platforms.
The trial, which is expected to wrap up by Friday, will end with a ruling from Judge Amit Mehta, who holds the power to reshape the future of Google’s search business. Government attorneys are urging him to go as far as forcing Google to sell its Chrome browser. They argue that Google’s powerful AI capabilities, backed by its access to enormous data from services like YouTube, Maps, and Chrome, pose a serious threat to market fairness.
But Cue’s testimony offered a twist. It supported Google’s defense that AI is already cutting into its dominance. Chatbots, unlike traditional search engines, are attracting users by offering direct answers, which could pull traffic away from Google.
Judge Mehta’s decision, expected in August, could go a number of ways. He might end Google’s ability to make search default deals with companies like Apple. Cue admitted in court that this outcome could be damaging for Apple, potentially limiting their ability to invest in software and product upgrades.
Alternatively, the judge could order Google to share its search data with rivals, something Google CEO Sundar Pichai strongly opposed, calling it a forced breakup of its core business.
In response, Google has proposed a less drastic plan. They suggest continuing their payments for default search status, but want yearly renegotiations and more choice for device makers on which apps to install.
This case is just one of five major antitrust battles the U.S. government is fighting against big tech companies. Meta is also in court, and Google is facing separate legal trouble over its ad tech practices. Apple and Amazon are likely next in line.
