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Investing.com -- Shares of Alphabet Inc. (NASDAQ:GOOGL) fell 2% as the outcome of a federal antitrust case remains uncertain. During a recent hearing, U.S. District Judge Amit Mehta indicated he might consider less stringent measures than those proposed by the Department of Justice (DOJ) to address Google’s dominance in online search and advertising.
The judge expressed hesitancy over a 10-year plan suggested by antitrust enforcers, pointing to the rapid changes in the tech industry as exemplified by developments like OpenAI’s acquisition of a device startup. The DOJ, along with a coalition of states, has proposed that Google should end its multibillion-dollar payments to be the default search engine on new devices and share search data to foster competition.
The trial, which began in April, has already impacted Google’s share price by revealing Apple (NASDAQ:AAPL)’s plans to develop AI-based search options. Judge Mehta’s ruling, expected by August, could shape the competitive landscape, with implications for Google’s AI ambitions and its partnerships with smartphone manufacturers.
The legal proceedings have cast a spotlight on the intersection of search monopolies and emerging AI technologies. OpenAI’s Nick Turley testified that access to Google’s search data could accelerate the improvement of ChatGPT, while Google’s attorney argued against sharing proprietary technology with market leaders like OpenAI.
Analysts from Barclays (LON:BARC) and TD Cowen weighed in on the potential outcomes of the case. Barclays holds an overweight rating with a price target of $220, stating that the court’s decision on remedies remains unclear, with the ban on distribution payments and syndication of ads/organic seen as the biggest risks. TD Cowen suggests that Judge Mehta might order all three proposed remedies but also acknowledges the possibility of more moderate outcomes.
"On Friday, Judge Mehta heard closing arguments in the Google Search remedies trial. We’re now inclined to think he orders all three of DOJ’s proposed remedies -- ban on TAC, Chrome divest, data sharing. But he did indicate openness to middle grounds and concerns with collateral damage to others in the ecosystem. So more modest/nuanced outcomes are likely still on the table," wrote TD Cowen analyst Paul Gallant.
As the market digests the implications of the ongoing antitrust case, Alphabet’s stock reflects the uncertainty surrounding the tech giant’s future in a rapidly evolving digital landscape.