Google has been found to have violated antitrust laws, specifically Section 2 of the Sherman Act, by maintaining its search engine monopoly through exclusive deals. Despite this ruling, Alphabet (Google’s parent company) and Apple saw only a slight dip in their stock prices. Both companies’ stocks fell about 5% that day, largely due to a broader market downturn rather than the ruling itself.
Judge Amit Mehta confirmed that Google holds a monopoly in internet search and has used its power unfairly to keep that position. However, he noted that Google does not dominate search advertising, with competitors like Amazon providing enough competition in that area. The judge’s ruling on potential remedies is still pending, leaving investors to guess what changes might come. One possibility is that Google could be required to let users choose their default search engine, similar to what it does in Europe.
Apple, while not directly sued, is deeply affected by the case because Google pays Apple a significant amount of money to be the default search engine on iPhones. If Google loses this status, it could impact Apple’s earnings.
In other news, US stocks had a rough week. The Dow Jones Industrial Average dropped more than 1,000 points, and both the S&P 500 and Nasdaq fell over 3%. This sharp decline is a sign of growing recession concerns, though the outlook for AI technology remains positive. The Nasdaq Composite fell 3.4%, and the S&P 500 experienced its 101st drop of 3% or more since 1993. Japan’s stock market also had a severe decline, the worst since 1987. Nvidia’s stock fell 6.4% after news of a delay in its new AI chip, though this drop was less than expected and the stock price was similar to its position in May after a recent stock split.