DOJ’s Google breakup plan could disrupt partnerships, harm other web browsers

The news: The Department of Justice’s (DOJ) plan to break up Google’s monopoly could have far-reaching effects on smaller web browsers and cost Apple billions of dollars.

• The DOJ proposed last week that Google be forced to stop paying partners such as Apple billions of dollars per year to make Google Search the default search engine on web browsers.
• The DOJ also wants Google to sell off its Chrome web browser, which could fetch as much as $20 billion.

Search partnerships are a crucial revenue source for companies like Mozilla, and attempts to create a fair market could actually harm the competitive landscape.

Trickle-down effects: Mozilla stated that the DOJ’s plan will be detrimental to search engines that rely on royalties from Google.

• “The prohibition on search agreements with all browsers regardless of size and business model will negatively impact independent browsers like Firefox and have knock-on effects for an open and accessible internet,” Mozilla stated.
• Google pays more than $450 million per year to be the default search engine on Firefox’s homepage, per Bloomberg.

Apple’s liabilities: Apple’s core business is already in a slump—it cut production of its iPhone 16 by about 10 million units in October.

The hardware giant’s services business now accounts for about one-fourth of its revenue, but Google is still a big part of its balance sheet—it paid Apple about $20 billion in 2022 to be the default search engine on Safari browsers.

But there may be beneficiaries: Banning Google’s search partnership could open the door for other search engines to step in.

• It would be an opportunity for Bing, Yahoo, or DuckDuckGo to snap up those partnerships, even if they pay less than Google has been.
• Apple might be incentivized to revisit its plans for an Apple search engine product, a plan it abandoned last fall due to its reliance on Google Search and the latter’s market dominance.

Our take: Web browsers will need to dramatically pivot their business models or ramp up ad revenue to cover losses if the DOJ’s plan is implemented.

The DOJ could alternatively impose limits on how much Google can pay to provide a default search engine or create a capped bidding system for such agreements.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.