The Trump administration sued Google on Tuesday in what is the largest antitrust case against a tech company in more than two decades.

At the heart of the government’s lawsuit is a secretive deal under which Google allegedly pays billions of dollars a year to Apple to ensure that its search product is the default on iPhones and other Apple devices. Google has similar agreements with other companies, but the size of the Apple deal makes it especially crucial to the search giant.

The deal

Google CEO Sundar Pichai and Apple boss Tim Cook, met in 2018 to discuss how their companies could work together to drive search revenue growth, according to the DOJ. A senior Apple employee wrote to a counterpart at Google following the meeting: “Our vision is that we work as if we are one company.”

What Google gets

The agreement covers roughly 36% of all general search queries in the United States, according to the DOJ. The suit also claims that almost 50% of Google’s search traffic originated on Apple devices in 2019.

Very few people change their default search engine on Apple devices. Google is then able to monetize all those eyeballs.

What Apple gets: In exchange for access to its massive user base, Google pays Apple billions of dollars a year in advertising revenue. Apple may be getting $8 billion to $12 billion annually, according to the suit.

Big deal

The arrangement is so important to Google that losing it would be a “Code Red” situation for the search giant, the DOJ said.

“Google pays Apple billions to be the default search provider, in part, because Google knows the agreement increases the company’s valuable scale; this simultaneously denies that scale to rivals,” the suit argues.

Google has described the DOJ suit as “deeply flawed.”

“People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives,” Kent Walker, the company’s senior vice president of global affairs, wrote in a blog post.

“Like countless other businesses, we pay to promote our services, just like a cereal brand might pay a supermarket to stock its products at the end of a row or on a shelf at eye level,” he continued.

Walker also specifically addressed the deal with Apple.

“Our agreements with Apple and other device makers and carriers are no different from the agreements that many other companies have traditionally used to distribute software,” he said.

What’s next?

Justice Department officials did not rule out a breakup of Google on a call with reporters.

“Nothing is off the table,” said Deputy Attorney General Jeffrey Rosen, who warned that if DOJ did not file suit now, “we could lose the next wave of innovation” and that “Americans may never get to see the next Google.”