Google Parent shares fall 5% after US forces Google to sell Chrome

Topline

Shares of Google parent Alphabet fell more than 5% on Thursday, marking their biggest stock selloff in 10 months, after the Justice Department ordered Google to sell its Chrome browser to “permanently stop” the company’s monopoly on the search engine market.

Federal officials said the sale would “permanently end” Google’s control of search. … (+) motor monopoly.

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Key facts

Alphabet shares fell to around $166 around 2:40 pm EST, the biggest drop for the stock since falling 7% on Jan. 30, when Alphabet’s fourth-quarter earnings showed ad sales that were below analysts’ forecasts.

Ministry of Justice asked Justice Amit Mehta, who rules in August, Google violated antitrust laws by ordering Google to sell its Chrome browser, saying the move would allow rival search engines access to the browser.

Federal officials also sought to prevent Google from re-entering the browser market for five years after the sale and reaching agreements with Apple or Samsung to make Google’s search engine the default on their devices.

The Justice Department’s proposal represents the “worst available remedy” for Google’s antitrust case, and expanding the search and search advertising market to Google’s competitors “could jeopardize” the company’s competitive advantage, JPMorgan said in a statement Thursday.

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What to pay attention to

The Justice Department has failed to ask Google to abandon Android, although the agency has called for changes to the Android operating system that would prevent its devices from favoring Google’s search engine and Google’s advertising provider. If these changes are not implemented properly, the Justice Department said Mehta should force Google to sell Android.

Chief critic

Google convicted The US Department of Justice for pursuing what it calls a “radical interventionist agenda” that the company says will “harm Americans and America’s global technology leadership.” The Justice Department’s proposal would also jeopardize the “security and privacy of millions of Americans,” Kent Walker, Google’s chief legal officer, wrote in a blog post.

Key background

In August, Mehta ruled that Google was a “monopoly” and took steps to maintain its search engine monopoly. The Justice Department and 11 state attorneys general filed an antitrust case against Google in October 2020, alleging that the company engaged in “anticompetitive and exclusionary practices” to maintain a search engine monopoly, saying Google was used for nearly 90% of Americans’ online searches. Mehta is expected to hear arguments from both the Justice Department and Google on how to respond to the claims, and Google is required to respond to the Justice Department’s proposal by Dec. 20.

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Key facts

What to pay attention to

Chief critic

Key background

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