Alphabet Inc (GOOG)

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Barclays anticipates Google defeat in antitrust case, stock rises
By: Investing | November 14, 2023

Alphabet (NASDAQ:GOOGL) Inc. (NASDAQ:GOOG), the parent company of Google, is currently navigating through a challenging antitrust lawsuit. Despite a prediction from Barclays that the tech giant may face a defeat in the U.S. antitrust case, Alphabet's shares experienced an unexpected rise, increasing by 1.5% today. This legal battle has been brought into sharper focus following expert testimony on Monday that disclosed Google derives a significant 36% of its search advertising revenue from Safari users.

The spotlight on Google's revenue-sharing agreement with Apple Inc. (NASDAQ:AAPL) could provide leverage to regulatory authorities like the U.K.'s Competition and Markets Authority (CMA). The authority may consider enforcing measures similar to those used in Europe, such as "choice screens" for search engines and limits on revenue sharing. These measures have been implemented on some Android devices in Europe but have had limited impact on Alphabet's market valuation.

Despite these challenges, Wall Street maintains a positive outlook on Alphabet's financial prospects.

The case against Google has been gaining momentum since earlier in November 2023, when Barclays raised concerns about the formidable case built by the U.S. Justice Department. The unique market dynamics of iOS devices in the U.S., which are due to evolve in 2024, could exacerbate the impact if Google were to lose this legal dispute. This outcome could lead Apple to consider alternatives for its search service, potentially partnering with Microsoft (NASDAQ:MSFT)'s Bing or developing its own search engine.

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