legal-document-to-plain-english-translator/”>Try Free Now: Legalese tool without registration

Find a LOCAL lawyer

Apple and Google’s New Collaboration: Echoes of History

Apple Inc. has recently unveiled its collaboration with Google LLC, aiming to harness the power of Gemini as the core foundation for Apple Intelligence, which will enhance services like Siri. This announcement might evoke a sense of déjà vu for those familiar with the tech industry. After all, we’ve encountered scenarios like this before, and we’re aware of how they typically conclude.

A Historical Precedent: The Google-Apple Internet Services Agreement

Back in 2016, Google and Apple entered into a similar partnership through the Google–Apple Internet Services Agreement (ISA). This agreement made Google the default search engine for Apple’s devices. While theoretically, users had the option to select alternative search engines or download other browsers, very few actually exercised this choice in practice.

In 2024, a federal judge ruled that such distribution agreements were anticompetitive, revealing that the designated defaults often created “foreclosure effects”—effectively limiting genuine competition in the marketplace.

Drawing Parallels: The Gemini Deal

The new Gemini arrangement appears to mirror past agreements. By positioning Gemini as a key element in crucial touchpoints of the Apple ecosystem, such as Siri, it creates a highly advantageous positioning for Google. Initial reports indicate that this partnership is non-exclusive, suggesting that Apple might consider alliances with other foundational models and that consumers could opt for different chatbots or browsers.

However, similar claims were made concerning the earlier search agreements. The fundamental lesson from the Google search case remains relevant: in the realm of digital markets, default settings often wield more influence than outright exclusivity.

The Stickiness of Defaults

Defaults tend to be remarkably stubborn once established. In evidence presented during the Google case, it was shown that even when Microsoft Corp. offered an enticing deal, allowing Apple to keep 100% of Bing’s search revenue, Apple still opted to stick with Google. This points to an overwhelming inertia once a default is formed.

Judge Amit Mehta’s ruling also shed light on a critical perspective: not all contractual agreements need to eliminate every alternative for them to be considered exclusive in their effects. If a partnership restricts a significant portion of distribution opportunities, it can create anticompetitive landscapes. The Apple–Gemini collaboration risks perpetuating a similar situation in the AI distribution arena.

The Value Proposition: Foundation Models vs. Search Engines

The foundation model that could empower Apple’s ecosystem through Gemini may provide even greater value than merely being a default search engine on Apple devices. Unlike switching a search engine or browser, it remains ambiguous whether users will have the option to alter the foundational model driving their iPhone’s AI features. Should changes be possible, it is likely to involve just as much, if not more, complexity than changing a search engine.

Notable Differences in the Ecosystem

Although there are distinctions between the ISA and the Apple–Gemini agreement—such as Safari serving as a crucial online gateway while Siri is not yet the primary access point for AI—there is a significant point to consider. As AI technologies advance and become more integrated into everyday tasks, the role of voice assistants and operating system-level AI features is likely to grow in relevance.

While discussions about consumer behavior shift and the prevalence of chatbots potentially eclipses traditional search engines, the hardware ecosystem—primarily iPhones and MacBooks—will still heavily influence which AI model dominates the market.

The Argument for Product Design

Proponents of the Gemini deal may argue that it constitutes normal product design, akin to Apple selecting its camera lens provider. Since consumers typically don’t have a say over such components, why should AI models be treated differently?

The answer hinges on our interpretation of what foundation models represent. If viewed merely as components, Apple has a point in asserting its rights to select its chosen model. However, if they are seen as general-purpose infrastructural components, similar to search engines or operating systems, then having control over defaults emerges as a matter of competitive significance. Given how significantly these AI models can influence information access, creativity, and economic prospects, the latter viewpoint is hard to ignore.

Antitrust Implications and Challenges

The Apple–Gemini deal also raises questions around the complexities of antitrust regulations in fast-evolving tech markets. Under Section 2 of the Sherman Act, antitrust challenges require proof of adverse competitive effects. Currently, the landscape for foundation models seems robust and competitive, with players like ChatGPT, Gemini, and Claude demonstrating their presence. This vibrant competition complicates the pursuit of clear evidence of anticompetitive issues resulting directly from the Apple–Gemini partnership.

As one firm gains control over a critical distribution channel, the competitive atmosphere can deteriorate swiftly. These detrimental effects, however, often emerge only after the defaults have established themselves. Thus, we confront an antitrust dilemma: it becomes challenging to challenge actions before markets tip toward monopolization, and equally difficult to reverse such trends once they’ve taken root.

Lessons from the Google Search Case

The Google search case elucidates this inherent asymmetry. Following extensive litigation and establishing liability, the resulting remedies appeared minor and anticlimactic. Ultimately, Google’s dominance in search remains largely unchallenged.

As Google’s innate advantages further consolidate in the realm of AI, caution may be warranted. In recent years, the rise of companies like OpenAI and Anthropic PBC was often highlighted as evidence of intense industry competition. Yet, this view may have underestimated the entrenched advantages possessed by tech giants. Google brings substantial publisher data extracted from its search index into the Gemini project, offering seamless integration into search results via AI features, while also leveraging Android as a distribution platform.

Competitive Incentives and the Future of AI

The Gemini partnership alters Apple’s strategic incentives. With access to a robust foundation model through Google, will Apple remain motivated to invest in developing or collaborating with rival models?

This dynamic is not unprecedented. Previously, the courts indicated that Apple’s distribution agreement with Google stifled Apple’s drive to create its search engine, forming a kind of truce that limited competitive engagement between the two giants.

Missing the initial wave of AI advancements, Apple may find it more pragmatic to integrate with Google’s superior models rather than foster its own development. While this could be deemed a sound business approach, it continues the trend where leading firms entrench their positions, further dividing monopoly profits rather than fostering healthy competition.

The Role of AI legalese decoder

In navigating the complexities of such agreements, AI legalese decoder can serve as a valuable resource. By simplifying and clarifying legal jargon, this tool can empower stakeholders to understand the implications of contracts like the Apple–Gemini agreement more effectively. It can assist users in discerning potential antitrust issues, helping them identify any competitive advantages or disadvantages inherent in such collaborations.

Utilizing AI legalese decoder can also facilitate a more informed public conversation around these high-stakes partnerships, ensuring that consumers and businesses are aware of the possible long-term effects on market competition and innovation.

Conclusion

As the tech landscape evolves, ongoing vigilance is necessary regarding how corporate alliances shape market dynamics. Both consumer choice and competitive integrity are at stake as foundational models become increasingly central to digital interaction and discovery.

Author Information

Madhavi Singh is the deputy director of the Thurman Arnold Project and a resident fellow at the Information Society Project at Yale Law School.

Write for Us: Author Guidelines

legal-document-to-plain-english-translator/”>Try Free Now: Legalese tool without registration

Find a LOCAL lawyer

legal-exchange-insights-and-commentary/google-apple-gemini-deal-underscores-techs-antitrust-catch-22″>Reference link