The shares of Alphabet Inc which closed 1.82% higher on October 12 have even surged an additional 1.24% in the pre-market despite reports that the feds might force the company to split key units of its advertising business.
Per the report from Politico, the Department of Justice, as well as state prosecutors, are investigating Google for its extensive grip on both the world’s search engine which gives it a competitive edge in the advertising industry.
Google alongside its counterparts Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), and Facebook Inc (NASDAQ: FB) has been under regulator’s radars since the firms were involved in an AntiTrust hearing with Congress Judiciary subcommittee on antitrust back in July. While the aftermath of the hearing has not yet been seen for all of the big 4 tech firms, the clampdown on one might spell an economic offset for the rest.
As current reports will have it, the Department of Justice is well on its way to file an antitrust lawsuit against Google come next week and the case could result in the company being forced to give up its Google Chrome web browser as well as its advertising business units. The department of Justice reportedly came to these conclusions to enforce this split based on recommendations from Google’s (GOOGL) competitors.
Google (GOOGL) investors seem undeterred with the news to split some of the company’s major revenue streams as shown in the current stock performance. Alphabet Inc (NASDAQ: GOOGL) in a statement reported by Coinspeaker the previous week has warned that any potential move by the regulators may hurt more of consumers while unfairly giving an advantage to competitors.
Google Impending Split, Same Fate for Other Big Tech Names
In an era where a global pandemic has relatively brought about the growth of some key sectors including social media, e-commerce, and tech devices, all on offer by the four embattled tech firms, a commemorative growth in revenue and profits will only propound the case for regulators who seeks to cut their profound powers.
Now that the DOJ is after Google (GOOGL) in which it is considering a split option for the California-based business, observers believe that it is only a matter of time before such moves are made for the others also.
With Google’s dominance in the web search section where other browsers such as Mozilla Firefox and Apple’s Siri are, the company’s moves to begin limiting the use of third-party Cookies on its Chrome browser as well as in declaring that apps on its stores must start using inbuilt payment services as from Sept. 2021 has further stirred regulator’s desire for a clampdown.
While the anticipation builds as to whether the DOJ will make a move for similar sanctions on the other tech firms in the near future, the current focus on Google may likely change investor’s reactions to the company’s shares in the short term.