For 15 years, Apple and Google — Silicon Valley’s two most valuable companies — have been partners in one of the most lucrative business deals in history: an agreement to feature Google’s search engine as the preselected choice on Apple devices, including the iPhone.
The deal, updated over the years, has been worth billions of dollars to both companies, but it is now in jeopardy after the Justice Department filed a landmark lawsuit last week that accused Google of using illegal tactics — like the rarely discussed pact with Apple — to protect its monopoly and choke off competition in web search.
Apple and Google’s parent company, Alphabet, compete on plenty of fronts, like smartphones, digital maps and laptops. But the rivalry has been put aside when it suits their financial interests.
Nearly half of Google’s search traffic comes from Apple devices, according to the Justice Department, and the prospect of losing the Apple deal has been described as a “code red†scenario inside the company. When iPhone users search on Google, they see the search ads that drive Google’s business. They can also find their way to other Google products, like YouTube.
In exchange, Apple receives an estimated $8 billion to $12 billion in annual payments.
After a meeting in 2018 between the companies’ two chief executives, Tim Cook and Sundar Pichai, a senior Apple employee wrote to a Google counterpart that “our vision is that we work as if we are one company,†according to the Justice Department’s complaint.
The Justice Department argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.
Long before the coronavirus swept across Europe this spring, many cities were complaining that a proliferation of short-term apartment rentals aimed at tourists through platforms like Airbnb was driving up housing costs for locals and destroying the character of historic districts.
Now that the pandemic has all but cut off the steady flow of visitors, many European cities are seizing an opportunity to push short-term rentals back onto the long-term housing market.
In Lisbon, the capital of Portugal, the city government is becoming a landlord itself by renting empty apartments and subletting them as subsidized housing. In Barcelona, Spain, the housing department is threatening to take possession of empty properties and do the same.
Other city governments are enacting or planning new laws to curb the explosive growth of rentals aimed largely at tourists. Amsterdam has banned vacation rentals in the heart of the old city, and Paris is planning a referendum on Airbnb-type listings.
When tourists are plentiful, renting a property on a short-term basis can be more lucrative for owners than a long-term tenant, something that city governments say has distorted housing markets in cities where supply is already tight.
“We entered the pandemic with a huge pressure on our housing market, and we cannot afford to exit the pandemic with the same set of problems,†said Lisbon’s mayor, Fernando Medina.
The city has started signing five-year leases for empty short-term rental apartments. These properties are then sublet at lower prices to people eligible for subsidized housing. The city government has set aside 4 million euros, or about $4.7 million, for the first year of subsidies.
The program is aiming to attract 1,000 apartment owners this year, and has drawn 200 so far. Mr. Medina said he was confident that the plan would meet its goal, since a quick rebound in tourism seems increasingly unlikely as the pandemic drags on.
