Alphabet Stock Slides As DOJ Pushes Chrome Divestment To Counter Google Monopoly: Retail Eyes Buying The Dip

Alphabet, Inc. ($GOOGL) ($GOOG) was among the top-trending and the most-active tickers on Stocktwits on Thursday as the stock tumbled to its lowest level in nearly a month after the Department of Justice (DOJ) proposed several measures to clip the company’s wings.

Lawyers representing the DOJ submitted the “Initial Proposed Final Judgment (PFJ),” recommending comprehensive and unitary remedy to ensure Google cannot further cement its search monopoly by engaging in anti-competitive conduct.

The “interconnected and self-reinforcing” remedies proposed included:

• Blocking exclusionary agreements with third parties such as Apple and Samsung
• Preventing self-preferencing by Google through its ownership and control of search-related products
• Preventing Google from stifling or eliminating competitive threats through acquisitions, minority investments or partnerships
• Ensuring disclosure of data critical to restore competition
• Increasing transparency and control for advertisers
• Ending Google’s unlawful distribution
• Enforcement of PFK

As part of steps to prevent Google’s self-referencing, the DOJ sought that Google divest its Chrome browser. 

The Chrome default is “a market reality that significantly narrows the available channels of distribution and thus disincentivizes the emergence of new competition,” the lawyers said.

Additionally, Google should be prohibited from reentering the browser market for five years, and also be kept from owning or acquiring any search or search text ad rival, search distributor, or rival query-based AI product or ads technology.

Through the PFJ, the federal regulator called for divestiture of Android if its proposed remedies are not effective in preventing Google from improperly leveraging its control of the Android system to its advantage.

"Consistent with the Court’s scheduling order governing remedy proceedings, Plaintiffs will file a Revised PFJ on March 7, 2025," the lawyers said in the filing.

The stern measures came after a federal judge ruled in August that Google holds a monopoly in the search market in response to a 2020 case filed by the government. 

Alphabet’s third-quarter results released in late-October showed that the company derived roughly 78% of its revenue from Google advertising, with about 74% of that coming from Google Search and others.

A CNBC report said, citing legal experts, a Google breakup is unlikely but the court could ask the company to do away with some exclusive agreements and make it easier for users to access other search engines.

Alphabet’s Class A shares fell 5.45% to $166.39 at the last check. 

GOOGL sentiment and message volume November 21, 2024, as of 12:56 pm ET | Source: Stocktwits

Retail followers on Stocktwits shrugged off the legal overhang and stock weakness, and turned ‘extremely bullish’ (88/100) on the stock, better than the ‘bullish’ mood a day ago. Message volume spiked to ‘extremely high’ amid the development.

Retail saw the pullback as an opportunity to increase their exposure to the stock.

Most bet on the incoming Donald Trump administration going easy on these antitrust regulations.