Antitrust regulators don’t seem to faze big tech investors. Google’s parent company, Alphabet, experienced only a minor stock drop after Judge Amit Mehta ruled it had violated antitrust laws to maintain its search monopoly, per The Information.
Apple, which could be significantly impacted by the ruling, saw even less of a decline. Both companies’ stocks fell nearly 5% during the day’s trading due to a broad market slump, having already been down before the ruling.
Judge Mehta confirmed Google’s monopoly in internet search, sustained through exclusive deals with Apple and others to be the default search engine on iPhones and Android devices. “After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” he said. “It has violated Section 2 of the Sherman Act.”
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However, the judge found that Google does not hold a monopoly in search advertising, citing competition from rivals like Amazon.
Despite the ruling, investors seem optimistic about Google’s future
The judge has yet to determine the “remedies” for the antitrust breach, leaving the market to speculate. One potential remedy could be offering consumers a choice of default search engines when setting up new phones, a practice Google has implemented in Europe without losing market share.
Apple, although not directly sued, is heavily involved. Google pays Apple significant sums to remain the default iPhone search engine, with the ruling mentioning a $20 billion estimate for 2022, constituting 17% of Apple’s operating profit. Should Google lose its exclusive status, it might stop these payments, impacting both companies.
“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” said President of global affairs Kent Walker in a public statement.
ALSO READ| How Google produces its search results, US court documents show: ‘Not by happenstance’
Wall Street saw bloodbath as Dow Jones crashes
US stocks suffered a brutal bloodbath last week as the Dow Jones Industrial Average plummeted over 1,000 points, with the S&P 500 and Nasdaq sinking more than 3%. Wall Street fell like this nearly after two years as recession worries intensified, but AI’s growth story remains intact, according to Capital Economics. But more fear worsens that the U.S. economy is slowing down with this.
The broader market saw a significant, may not be catastrophic, decline. The Nasdaq Composite dropped 3.4% and the S&P 500 fell 3%. This marks only the 101st time since 1993 that the S&P has dropped 3% or more. Comparatively, Japan’s market faced its worst day since 1987, per The Information report.
Nvidia’s stock fell 6.4%, better than anticipated after news of a delay in its new AI chip. Nvidia closed just above $100, similar to its May position, adjusting for a June stock split.