Google and Apple Stocks Downplay Antitrust Rulings: Here’s Why Investors Are Upbeat

Antitrust regulators don’t seem to be a surprise to big tech investors. Google’s parent company, Alphabet, saw its shares fall only slightly after Judge Amit Mehta ruled that it violated antitrust laws to maintain its search monopoly, according to The Information.

Apple, which could be significantly affected by the ruling, fell even more modestly. Shares of both companies fell nearly 5% on the day amid a general market decline, having already been down before the ruling.

Judge Mehta affirmed Google’s monopoly on Internet search, maintained through exclusive agreements with Apple and others to be the default search engine on iPhones and Android devices. “After careful consideration and consideration of the witness testimony and evidence, the court concludes that Google is a monopoly and has acted as a monopoly to maintain its monopoly,” he said. “This violated Section 2 of the Sherman Act.”

READ ALSO| Meet Gujarat-born US judge Amit Mehta, who delivered a groundbreaking ruling in Google antitrust case

However, the judge found that Google does not have a monopoly on the search advertising market, citing competition from rivals such as Amazon.

Despite the verdict, investors seem optimistic about Google’s future

The judge has yet to determine “remedies” for the antitrust violation, leaving the market up to speculation. One potential remedy could be to offer consumers a choice of default search engines when setting up new phones, a practice Google has implemented in Europe without losing market share.

Apple, while not directly sued, is heavily involved. Google pays Apple significant amounts to remain the iPhone’s default search engine, and the ruling mentions an estimated $20 billion in 2022, or 17% of Apple’s operating profit. If Google loses its exclusive status, it could end those payments, which would impact both companies.

“This decision recognizes that Google offers the best search engine, but says we shouldn’t be able to easily share it,” global president Kent Walker said in a public statement.

READ ALSO| How Google Generates Search Results, US Court Documents Show: ‘Not by Accident’

Wall Street saw a bloodbath as Dow Jones crashed

U.S. stocks took a brutal beating last week, with the Dow Jones Industrial Average falling more than 1,000 points and the S&P 500 and Nasdaq each falling more than 3%. Wall Street fell nearly two years in a row as recession fears intensified, but AI’s growth story remains intact, according to Capital Economics. But there are growing concerns that the U.S. economy is slowing along with it.

The broader market saw a significant, if not catastrophic, decline. The Nasdaq Composite fell 3.4% and the S&P 500 fell 3%. It was only the 101st time since 1993 that the S&P fell 3% or more. By comparison, the Japanese market had its worst day since 1987, according to a report by The Information.

Nvidia shares fell 6.4%, better than expected after news that a new AI chip was delayed. Nvidia closed just above $100, the same as it did in May, after factoring in a stock split in June.