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US DoJ Contemplates Breaking up Google's Alphabet

By Olivier Acuña | TH3FUS3 Chief Editor

August 14, 2024 07:10 PM

Reading time: 1 minute, 44 seconds

TL;DR The Department of Justice is considering breaking up Alphabet after a ruling found it monopolized the search market. Judge Amit Mehta's decision could lead to Alphabet divesting from Android, Chrome, and AdWords. Alphabet stock reacted negatively in pre-market trading.

The Department of Justice (DoJ) is weighing on whether to break up Alphabet (NASDAQ: GOOGL) after an antitrust ruling that claims that the search engine giant monopolized the search market.

Judge Amit Mehta's Ruling

After Judge Amit Mehta's August 5 ruling found GOOGL guilty of locking up 90% of the search engine market, the DoJ is considering whether to force Alphabet to divest from its key ventures, such as Android, Chrome, and its AdWords platform. This move could seriously impact the company.

Stock Market Reactions

The most recent trading session saw GOOGL shares close trading at $164.16 after adding 1.15%, thus continuing the progress of 1.71% the stock made in the previous five trading days.

However, as the news of a possible Google breakup came after the markets closed, Alphabet stock reacted negatively, shedding 0.90% of its value in pre-market.

In the latest trading session, GOOGL stock has moved up above its closest resistance zone, which was identified at $163.81. However, if the losses from pre-market trading hold or extend, this zone needs to be reclaimed again, as the $164.10 price level no longer acts as a support level.

In case of sustained losses, Alphabet shares' next support level is identified at $154.92, which was previously formed in April.

Relative Strength Index (RSI)

The most recent reading of the Relative Strength Index (RSI) shows that GOOGL stock has sustained upward momentum, closing at 59.62 on August 13.

Broader Implications

In addition to a potential divestment ruling for Alphabet, judges may order Alphabet to ban revenue sharing.

This would directly impact revenues for companies such as Apple (NASDAQ: AAPL), Samsung, and Mozilla, which receive billions of dollars from setting Google as a default search engine on their devices and internet browsers.

Furthermore, Alphabet may be ordered to share its database or algorithms with its competition, thus allowing it to improve and significantly overcome the gap it currently has with Google.

"Alphabet may be ordered to share its database or algorithms with its competition."

The potential breakup of Google could mark a historic moment in tech and antitrust laws, setting a precedent for future actions against tech giants.

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