Alphabet Inc., the parent company of Google, may avoid significant penalties in two of the three antitrust lawsuits it currently faces, according to an analyst. Rohit Kulkarni, an analyst at Roth MKM, believes Google’s chances of walking away with a fine are relatively low. This assessment comes after a federal judge ruled against Alphabet in August, deeming its payments to make Google the default search engine on smartphones an antitrust violation.
The judge, Amit Mehta, concluded that Alphabet’s payments to companies like Apple and Samsung to prioritize Google search on their devices stifled competition. The lawsuit alleged that Alphabet paid $26 billion over several decades to maintain its online search and advertising dominance.
In addition to the browser default lawsuit, Google is facing a €2.1 billion (approximately $2.3 billion) lawsuit filed by 32 European media groups. These groups claim they suffered losses due to Google’s practices in digital advertising. These lawsuits reflect increasing scrutiny of Google’s ad tech business by antitrust regulators.
Kulkarni’s prediction of minimal repercussions stems from discussions with advertising industry veterans. He believes the remedies available in the search engine lawsuit are limited and the case could take more than a year to reach a resolution. Google has already announced its intention to appeal the ruling, potentially delaying the process.
However, Kulkarni highlights that Google might employ delaying tactics by stretching out these cases, hoping for a more favorable political climate. While acknowledging Google’s strong legal defense, Kulkarni also emphasizes the numerous unknowns and the early stage of the litigation.
The analyst’s panel of experts believe a spinoff of Google’s network business could be a positive outcome for the company. While acknowledging the possibility of a multi-billion dollar fine, they note that such a large penalty would be unprecedented.
Meanwhile, Yelp has filed a separate antitrust lawsuit against Alphabet, alleging that Google maintains its monopoly in local search by favoring its own services over competitors. Yelp argues this hinders competition and undermines the quality of local search results.
The lawsuit seeks an end to Google’s allegedly anticompetitive practices and demands damages. Yelp contends that Google’s actions ultimately harm both consumers and advertisers by stifling competition and allowing Google to charge higher fees with minimal consequences.
Although Alphabet’s stock rose slightly on Thursday, the potential for legal repercussions and ongoing investigations continue to cast a shadow over Google’s future.
