Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were pulling back today after the U.S. Justice Department (DOJ) asked a judge overseeing an antitrust case against the Google parent to order Alphabet to sell its popular Chrome web browser.
The news was the most recent sign of regulatory aggression toward Alphabet, and the stock was down 4.6% as of 9:56 a.m. ET.
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Alphabet has been no stranger to regulatory pressure, because the DOJ also recently said that Google’s payments to Apple to be the default search engine run afoul of antitrust rules.
The DOJ moreover argued that Google’s ownership of Android gave it an unfair advantage and summarized its case, saying, “The playing field will not be level due to Google’s conduct, and Google’s quality reflects the ill-gotten gains of a bonus illegally acquired.”
Alphabet pushed back on the DOJ’s argument, saying its demands would “hurt consumers and America’s global technological leadership.”
Chrome is not a direct revenue driver for Alphabet, however it helps the corporate bring users into its ecosystem, where it could drive ad revenue, collect their data, and form partnerships that help monetize the platform. Still, losing Chrome would likely be a major setback to Alphabet’s business and Google’s image, not to say the Justice Department’s other charges against the corporate.
The Trump administration is about to take over the DOJ in two months, so the long run of the case against Google is unclear.
The president-elect has enjoyed backing from a variety of Silicon Valley bigwigs and enterprise capitalists, and Wall Street also cheered the election result, believing that it will bring less regulation. Plenty of financiers consider the Biden administration has overstepped its mandate in antitrust regulation and in blocking mergers and acquisitions.
Still, investors clearly see the DOJ case as a risk to the stock, and a judgment in favor of the DOJ would damage Google. The federal court overseeing the case has scheduled a two-week hearing in April 2025 to find out what changes the corporate must make in order that it is not any longer an illegal monopoly, and the case is predicted to be resolved sometime next yr.
Investors should expect the news to proceed to maneuver the stock, and be looking out for further updates on the case.
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