According to Business Insider, in a December 2025 judgment, federal Judge Amit Mehta ordered Alphabet’s Google to limit all default search and AI app contracts to just one year. The ruling, stemming from his landmark 2024 finding that Google illegally monopolized online search, requires the company to renegotiate every default-placement agreement annually. This includes its lucrative, long-term deals with Apple for the iPhone and manufacturers like Samsung. The “hard-and-fast termination requirement after one year” is designed as antitrust relief to boost competition. The decision aims to open the door for rivals, especially in generative AI, to compete for default spots that have been locked in for years. It builds on a separate September order forcing Google to share some search ranking data with competitors.
The End of “Set It and Forget It”
For years, Google‘s strategy was brilliant in its simplicity. Pay Apple and Samsung billions to be the default search engine, lock in those deals for multiple years, and then basically stop worrying about that massive chunk of your user base. It was the ultimate “set it and forget it” user acquisition channel. Now, Judge Mehta is pulling the plug on that model. The annual renegotiation rule is a seismic shift. It means Google’s business development and legal teams will be in a constant state of bidding and deal-making. But more importantly, it introduces genuine uncertainty. Can you imagine the boardroom at Apple? Every single year, they get to auction off that precious default spot on the iPhone to the highest—or most strategically compelling—bidder. That’s a huge change.
AI’s Chance to Pounce
Here’s the thing: this ruling isn’t just about traditional search rivals like Bing or DuckDuckGo. Judge Mehta specifically mentioned opening the door for “fast-moving generative AI companies.” That’s the real story. Think about it. An AI startup with a killer conversational search product now has a plausible, annual shot at convincing a phone maker to make *them* the default. They don’t need to build a brand over a decade; they just need to win one big contract for one year. This turns the default spot from a permanent moat into a rotating showcase. It could accelerate the adoption of AI-native search interfaces by orders of magnitude. The pressure on Google to not just maintain, but *constantly* and *visibly* innovate its Search and AI offerings just went through the roof.
The Device Maker Dilemma
So this is great for competition, right? Well, maybe. But let’s not forget the other side of the table. Companies like Apple and Samsung have built massive, reliable revenue streams from these deals. Annual rebidding introduces volatility into their financial planning. Will they try to structure the bids to guarantee a minimum? Probably. But they also gain tremendous leverage. Every year becomes a chance to extract more money or better terms from Google—or to make a bold, public bet on an AI underdog for strategic or PR reasons. It creates a fascinating, high-stakes poker game that plays out in public every 12 months. The stability of the entire search ecosystem, at least on mobile, is gone.
What Google Does Next
Look, Google isn’t going to just walk away. Search advertising is its lifeblood. They’ll pay what they need to pay. But the calculus changes. The cost of retaining these defaults just became a recurring, unpredictable operational expense instead of a amortized long-term investment. I think we’ll see Google fight this ruling tooth and nail on appeal, arguing it’s overly punitive and disrupts legitimate business. In the meantime, they’ll have to pour even more energy into making their search product so indispensable that users would seek it out even if it weren’t the default. That’s the ironic twist. The ultimate antitrust remedy might force Google to compete on product quality alone, year after year. And honestly, isn’t that what this was all supposed to be about?
