The U.S. Department of Justice (DOJ) will reportedly push Alphabet’s (GOOGL) Google to sell its Chrome browser in the latest antitrust move. The DOJ will ask federal judge Amit Mehta to order Google to sell Chrome on the grounds of its monopolistic position in the online search market. In August, Google lost a landmark antitrust case where the judge ruled that the search engine giant illegally maintained a monopoly. The DOJ’s move to urge for the sale of the Chrome browser is part of the potential remedial measures to end this monopoly. GOOGL shares dropped 1% in after-hours trading on the news.
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Why Google Might be Forced to Sell Chrome
Chrome is one of Google’s most-priced assets since it earns billions of dollars in revenue through ads. The web browser is broadly used globally, and advertisers prefer running their ads on Chrome to reach a wider audience and practice targeted marketing. The DOJ is expected to ask the judge to license the results and data from Chrome. They will also reportedly push for Chrome to give websites more options to stop Google’s AI (artificial intelligence) products from scrapping content off their sites. This is still a much better option than having Google sell its Android operating system, which was one of the earlier remedies suggested by the DOJ.
Pros and Cons of the Judge’s Ruling
Google could avert Chrome’s sale if it brings about some changes to its policies that foster healthier competition in the online search space. On the other hand, if the judge accepts the DOJ’s proposal, it would go down as a historical crackdown on one of the biggest tech companies in the world. The DOJ, along with the states that are part of the case, are expected to put forth their recommendations to Judge Mehta on Wednesday.
Commenting on the possibility of a Chrome sell-off, Google’s vice president of regulatory affairs Lee-Anne Mulholland noted that the DOJ “continues to push a radical agenda that goes far beyond the legal issues in this case.” She added that such type of break-up would only harm consumers, developers, and the efforts of American tech companies to gain a prominent position in the world.
Alphabet is set to appeal judge Mehta’s ruling that said Google held a monopolistic power in both online search and search text ads. The next hearing is set for April 2025, when the judge will rule on what changes Google is required to undertake to break its dominance. The final ruling will be put forth in August 2025. For now, it’s a wait-and-watch story for Google.
Is GOOGL Stock a Good Buy?
Wall Street is highly bullish about Alphabet stock’s trajectory owing to its well-established business model. On TipRanks, GOOGL stock has a Strong Buy consensus rating based on 27 Buys and seven Hold ratings. The average Alphabet Class A price target of $207.75 implies 18.5% upside potential from current levels. Year-to-date, GOOGL shares have gained 25.8%.
