Tech giant Google (GOOGL) has proposed changes to its agreements with Apple (AAPL) and other companies to address a U.S. ruling that it unlawfully dominates online search, according to a Reuters report. Google’s proposal focuses on adjusting its agreements with companies where it is the default search engine on new devices.
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GOOGL’s View on Antitrust Remedies
However, Google’s proposal is far less extreme than the U.S. government’s recommendation to force the company to sell its Chrome browser. Google has argued that such a drastic move would constitute unnecessary interference in the search market. The company urged U.S. District Judge Amit Mehta to approach the issue cautiously, stressing that overly aggressive actions could stifle innovation. This comes after the judge ruled that Google holds an illegal monopoly over online search and related advertising.
Furthermore, in court papers accessed by Reuters, Google argued that considering the rapidly evolving role of artificial intelligence in search, antitrust remedies should take technological advancements into account.
GOOGL Has Suggested Non-Exclusive Agreements
To address the ruling, Google has suggested making its agreements with browser developers, device manufacturers, and carriers non-exclusive. This would allow for more flexibility in partnerships and reduce the company’s dominance in the market. In particular, Google proposed unbundling its Play Store from Chrome and Search for Android manufacturers. Additionally, it has suggested allowing browser developers to revisit their default search engine agreements on an annual basis.
Google also stated that it has no intention of ending its revenue-sharing agreements with developers like Mozilla, the maker of Firefox. These agreements involve Google sharing a portion of its ad revenue with developers who set Google as the default search engine. For example, according to Reuters, Apple earned an estimated $20 billion from its deal with Google in 2022.
These proposals set the stage for an April trial, where the U.S. Department of Justice, along with state coalitions, will likely push for broader, more sweeping remedies.
GOOGL Is Also Under Scrutiny in Japan
Meanwhile, Google is also under scrutiny in Japan. The company is preparing to challenge allegations from Japan’s Fair Trade Commission, which claims Google has engaged in anticompetitive practices, such as forcing smartphone makers to prioritize Google Search as the default. The commission has already issued a cease-and-desist order, accusing Google of obstructing competition, according to Reuters, citing a Nikkei report.
Is Google Stock a Buy, Sell, or Hold?
Analysts remain bullish about GOOGL stock, with a Strong Buy consensus rating based on 27 Buys and six Holds. Over the past year, GOOGL has increased by more than 30%, and the average GOOGL price target of $210.76 implies an upside potential of 10.1% from current levels.
