Alphabet Stock Dips in Premarket Amid Antitrust Breakup Threat

October 9

The U.S. Justice Department is considering recommending that Google-owner Alphabet (NASDAQ:) be forced to sell off parts of its operations in what has been called a “landmark antitrust case.”

This move is a potential remedy to address the tech giant’s alleged monopolization of the online search market. The case, currently in its remedy phase, follows a ruling that Google (NASDAQ:) violated antitrust laws in both online search and search text ads markets.

Google and DoJ’s Antitrust Strategy

The Justice Department filed a court document on Tuesday, October 8, 2024, outlining potential remedies against Google. Judge Amit Mehta, who is overseeing the case, is expected to hold a trial on proposed remedies in spring 2025, with a final decision anticipated by August 2025.

The DoJ is weighing both behavioral and structural remedies, including forcing Google to provide access to underlying data used for search results and AI products.

At the heart of DoJ’s case is the belief that Google gained unfair advantages through illegal distribution agreements with other tech companies, making its search engine the default option on smartphones and web browsers.

The department aims to prevent Google from leveraging products like Chrome, Play, and Android to advantage its search and search-related products over competitors.

A Google Breakup Will Be a Historical Event for Antitrust Enforcement

If successful, this would mark the first company breakup for illegal monopolization since the unsuccessful attempt to dismantle Microsoft (NASDAQ:) two decades ago. The case represents a significant shift in antitrust enforcement against big tech companies and could set a precedent for future actions in the industry.

As news of the potential breakup spread, Google’s stock (GOOG) showed signs of volatility. In pre-market trading as of 5:33 AM EDT, GOOG was down 1.25% to $163.63, following a previous close of $165.70 at the time of writing.

Despite the current dip, the stock has shown strong performance over the past year, with a 19.73% return, though still underperforming the S&P 500’s 33.48% gain.

Alphabet Inc., Google’s parent company, maintains a substantial market capitalization of $2.031 trillion, with a P/E ratio of 23.77 and earnings per share of $6.98.

Analyst recommendations remain mixed, with some rating it as “Outperform” or “Strong Buy,” and an average price target of $198.85, suggesting potential upside despite the ongoing antitrust concerns.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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