Shares of Alphabet ( GOOG -2.35% ) ( GOOGL -2.31% ) Stocks dropped today after a report from Bloomberg yesterday suggested that the U.S. Department of Justice was contemplating breaking up the company entirely as a result of previous legal actions, such as a recent court decision stating that payments made to businesses like Apple and Samsung Being the predetermined search engine on their devices was considered as an unlawful monopoly.
At 11:35 a.m. ET on Wednesday, the stock of Alphabet had decreased by 3.2%.
Photo credit: Getty Images.
The pressure increases on Alphabet.
Bloomberg reports that the department is contemplating the possibility of breaking up Alphabet as one of the options following the recent ruling on the company’s activities. control the majority of online search traffic via contracts that are unique to a specific party.
It should be emphasized that there is no formal decision to divide the company, as this information comes from a news outlet. However, the recent judgment mandates that the government must suggest ways to promote competition in the search industry, indicating that Alphabet may be subjected to penalties or limitations.
In a separate interview, former CEO Eric Schmidt criticized the company by stating that it had sacrificed its competitive advantage due to its extensive adoption of remote work policies and other initiatives focused on maintaining a work-life balance. He also mentioned that the company is lagging behind competitors in artificial intelligence, such as OpenAI and Anthropic.
Is it possible to divide Alphabet into separate entities?
Selling Alphabet stock in response to today’s news may be hasty. The recent ruling suggests that Google might not remain the default search engine on iPhones and other devices, but this does not guarantee a loss in market dominance. Google’s position is largely due to user habits and its reputation as a top search engine. However, there could still be significant repercussions to consider.
Regardless of the circumstances, it is important for investors to monitor the situation, particularly with an upcoming election. The tech regulation could potentially be influenced by the incoming administration in the White House.
