Today's slide in Alphabet's stock prices.
Alphabet's shares, represented by symbols GOOG (-1.57%) and GOOGL (-1.76%), experienced a retreat today, following the U.S. Justice Department (DOJ) requesting a judge in an ongoing antitrust lawsuit against the tech giant to compel Alphabet to divest its renowned Chrome web browser.
As of 9:56 a.m. ET, the stock had plummeted by 4.6%.
Is Alphabet under scrutiny as an unlawful monopoly?
Alphabet has been subject to consistent regulatory scrutiny. Apart from the DOJ's latest allegation that Google's financial compensation to Apple to maintain its status as the default search engine contravenes antitrust regulations, the department also accused Google of abusing its ownership of Android to gain an unfair edge, asserting, "The playing field is unequal due to Google's unlawful conduct, and its excellence results from the illegal gains of an unfair advantage acquired by illicit means."
Alphabet countered the DOJ's stance, stating that the demands would negatively impact consumers and America's technological dominance globally.
Chrome may not generate direct revenue for Alphabet, yet it plays a crucial role in attracting users to its ecosystem, enabling the collection of user data, driving ad revenue, and forming partnerships to monetize the platform. Should they lose Chrome, it would undoubtedly represent a substantial blow to Alphabet's business and Google's reputation, in addition to the DOJ's other charges against the company.
What should we anticipate for Alphabet?
The DOJ case is set for resolution under the Trump administration, which will assume power in two months. The president-elect has received backing from prominent figures in Silicon Valley and venture capital, and Wall Street also cheered the election result, anticipating less regulation. However, certain financiers argue that the Biden administration has exceeded its authority in antitrust regulation and in hindering mergers and acquisitions.
Regardless, investors acknowledge the DOJ case as a potential risk to the stock, with a judgment in favor of the DOJ likely to impact Google adversely. A federal court is set to hold a two-week hearing in April 2025 to ascertain what adjustments Alphabet must implement to cease being an illegal monopoly, with the case expected to conclude towards the end of next year.
Investors should remain vigilant for additional developments on the case.
Given the ongoing antitrust lawsuit against Alphabet, some investors might consider diversifying their portfolios by exploring other finance opportunities. Regardless of the political shifts, the outcome of the DOJ case could significantly affect Alphabet's finance and investing prospects, making it crucial for investors to closely monitor developments.
