Market observers and analysts seem to be cheering Apple and Google’s big win against the U.S. Department of Justice (DOJ).
In a landmark antitrust ruling on Sept. 2, U.S. District Judge Amit Mehta delivered a nuanced decision in the Department of Justice’s (DOJ) case against Google, marking both a win and a setback for the tech giant. The court found that Google had unlawfully maintained a monopoly in the general search market, violating the Sherman Act. However, the judge rejected the DOJ’s most severe proposed remedies, including the forced breakup of Google’s Chrome browser and Android operating system.
Instead, Google was ordered to stop entering new exclusive search agreements with device makers and browsers, but was allowed to maintain its lucrative default search engine deal with Apple on iOS devices, a partnership reportedly worth over $20 billion annually to Apple. The court also mandated Google to share some search data with competitors to encourage competition, though it did not require the sharing of advertising data or the implementation of user choice screens as the DOJ had proposed.
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Wedbush Securities noted that a federal judge’s ruling in an antitrust case brought by the U.S. Department of Justice was a “massive win” for Alphabet and Apple.
“Google and Apple just got a massive win from the courts ruling that the ongoing $20 billion search deal between the two stalwarts will remain and not be barred in its current form. This was a black cloud worry over Apple’s stock as investors worried a Google Chrome breakup and/or forced to extinguish the search deal with Apple was potentially on the docket,” said analysts led by Daniel Ives.
The analysts added that this “is a monster win for Cupertino and for Google its a home run ruling that removes a huge overhang on the stock.”
Judge Amit Mehta ruled that Google must open up competition in online search by sharing more data with competitors, and said that the company could not enter exclusive contracts for search but could still pay for search engine inclusion.
“We think focus will now shift towards the positioning of GOOGL relative to megacap peers, and we highlight that shares have continued to trade for a discount versus META (META). Following today’s announcement, we are increasingly constructive in the longer-term durability ofGoogle’s Search business and are raising our estimates accordingly,” said the analysts.
“The outcome is broadly favorable for Google, in our view, with the court ruling against the most severe remedy proposals introduced by the DOJ [Department of Justice],” said Ives and his team.
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For Apple, the ruling was a significant victory, allowing it to preserve a major source of revenue and avoid operational upheaval. Following the decision, Apple’s stock price rose by over 3% in after-hours trading. While the ruling partially favored the DOJ by acknowledging Google’s monopoly and imposing restrictions, it highlighted the complexities regulators face in balancing antitrust enforcement with market realities in the tech industry.
Both Google and Apple have expressed intentions to appeal certain aspects of the decision, signaling that this legal battle is far from over. This case underscores ongoing challenges in regulating dominant tech companies and the evolving nature of antitrust law in the digital age.
While the court recognized Google’s monopoly in the search market, it stopped short of imposing the most drastic measures, allowing both companies to maintain key business arrangements that drive substantial revenue. This decision reflects the delicate balance regulators must strike, addressing monopolistic behavior without disrupting market stability or innovation.
The ruling also signals a shift toward more nuanced enforcement, focusing on fostering competition through data sharing rather than forced breakups. For investors and market watchers, the verdict brings clarity and relief, especially for Apple, which avoided potential financial and operational disruptions.