Alphabet stock slides as DOJ considers Google breakup push - Bloomberg

Alphabet (NASDAQ:GOOGL ) shares are down more than 1% premarket Wednesday after Bloomberg reported that the Justice Department is considering an option to potentially break up Google.

Bloomberg, citing people with knowledge of the deliberations, said it follows a landmark court ruling that found the company monopolized the online search market.

If it went ahead, it would be Washington's first move to dismantle a company for illegal monopolization since efforts to break up Microsoft two decades ago were unsuccessful.

Following the Bloomberg report, analysts at Wedbush explained that "last week the U.S. District Court ruled in favor of the DOJ in the case of U.S. v.
Google in a landmark decision, concluding that Google is a monopolist, and has acted as one to maintain its monopoly."

"Bloomberg is now reporting that the DOJ may pursue a breakup of Google as one of its options, although analysts believe this would be a stretch and also Google will clearly appeal these rulings which will be in the court system for years possibly," adds the firm.

Wedbush believes it may take several quarters and possibly years for a final outcome to be reached, and they do not expect any disruption to Google's near-term operations as a result of the ruling.

"The DOJ has not formally communicated what possible remedies it may pursue, and proceedings will likely be held in the coming months to determine potential remedies," analysts add.

Overall, they continue to believe a breakup of the Big Tech business models is "highly unlikely down the road," although they acknowledge that business model tweaks and heavier scrutiny of M&A will be front and center.

"In a nutshell, analysts view the regulatory landscape for tech as gaining some momentum over the next year, although the impacts to the business models of the tech stalwarts are believed to be relatively insulated for now and the Street will continue to view this as a background risk for the tech
sector as it all plays out in the court system," Wedbush concludes.

Source: Investing.com