Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) withdrew today after the U.S. Department of Justice (DOJ) asked a judge overseeing an antitrust case against Google’s parent company to order Alphabet to sell its popular Chrome web browser.
The news was the latest sign of regulators’ aggression toward Alphabet, with the stock down 4.6% as of 9:56 a.m. ET.
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Alphabet is no stranger to regulatory burdens, as the DOJ also recently said Google’s payments to Apple to be the default search engine in violation of antitrust rules.
The DOJ additionally argued that Google’s ownership of Android gave it an unfair advantage, summarizing its case by saying, “The playing field is not level because of Google’s conduct, and Google’s quality reflects its ill-gotten gains from an illegally acquired advantage.”
Alphabet pushed back on the DOJ’s argument, saying its demands would “harm consumers and America’s global technology leadership.”
Chrome isn’t a direct source of revenue for Alphabet, but it helps the company bring users into its ecosystem, where it can increase ad revenue, collect their data, and form partnerships that help monetize the platform. Still, the loss of Chrome would likely be a significant setback for Alphabet’s business and Google’s image, not to mention the Justice Department’s other charges against the company.
The Trump administration will take over the DOJ in two months, so the future of the case against Google is unclear.
The president-elect has received the support of some major Silicon Valley figures and venture capitalists, and Wall Street also cheered the election results, believing it would lead to less regulation. A number of financiers believe the Biden administration has overstepped its mandate on antitrust regulation and blocking mergers and acquisitions.
Still, investors clearly see the DOJ case as a risk to the stock, and a ruling in the DOJ’s favor would hurt Google. The federal court overseeing the case has scheduled a two-week hearing for April 2025 to determine what changes the company must make so it is no longer an illegal monopoly. The case is expected to be resolved sometime next year.
Investors should expect the news to continue to move stocks, and should look out for further updates on the matter.
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