By
Godfrey Benjamin
April 25th, 2024
The shares of Alphabet Inc fell after the Attorney Generals are asking the court at least to restrict or stop the search engine giant Google from engaging in anti-competitive practices.
Alphabet Inc (NASDAQ: GOOGL) stock fell 0.95% to $1,740 at the close of trading on Thursday as the company and its search engine outfit Google got slammed its third Antitrust lawsuit. The Google antitrust lawsuit according to a CNBC report was championed by a bipartisan coalition of states with the executive committee led by the states Tennessee, New York, Utah, Iowa, Nebraska, Colorado, North Carolina, and Arizona.
The Google antitrust lawsuit alleges similar claims made by the Department of Justice which faults Google’s search engine dominance. The lawsuit since it was filed sent the shares of Alphabet Inc down by 0.95% to $1,740.51 representing one of the bearish closes of the week. The investors appear to watch the ensuing events as no activity was recorded on the stock in the after-hours trading.
The new lawsuit filed by the bipartisan coalition totaling about 38 states and territories according to the CNBC report had a new twist in comparison to earlier lawsuits in that it claims Google maintained its search engine dominance through exclusionary contracts sealed with prospective competitors. Colorado Attorney General Phil Weiser said at a press conference on Thursday that the lawsuit goes beyond the DOJ’s in three core aspects.
First is that Google relies on “artificially-restrictive contracts” to give it “de facto exclusivity” in most distribution channels for search. A major example cited for this is the longstanding agreement between Google and Apple Inc (NASDAQ: AAPL) in which the latter made the former’s search engine the default on its devices, despite having its own search engine.
Secondly, the coalition alleges that Google operates by denying advertisers the ability to interoperate between its own ad tools and competitors’ for general search ads, disadvantaging the advertisers, and lastly, that the company uses “discriminatory conduct on its search results page” to limit the ability of vertical search providers, such as Yelp and Tripadvisor Inc (NASDAQ: TRIP), to reach consumers.
Google Antitrust Lawsuit: Demand and Google’s Response
Just as the other lawsuits preceding this, the Attorney Generals are asking the court to restrict or stop Google from engaging in the highlighted anti-competitive practices, and on the extreme end, a break up of the company in order to reduce its dominance is being proposed.
Google through its Director of Economic Policy Adam Cohen has faulted the lawsuit reiterating that the redesign of the search engine as recommended by the attorney generals would harm American consumers and businesses.
“This lawsuit demands changes to the design of Google Search, requiring us to prominently feature online middlemen in place of direct connections to businesses,” Cohen said in a Blog post “Redesigning Google Search this way would harm the quality of your search results. And it would come at the expense of businesses like retailers, restaurants, repair shops, airlines and hotels whose listings in Google help them get discovered, and connect directly with customers.”
With more to unfold in the coming days, Google stock is still among the top tech stocks with the biggest gains this year.