Alphabet’s (NASDAQ:GOOGL) Google faces one of its biggest legal battles. Analyst TD Cowen from Paul Gallant expects the technology and search giant to lose this antitrust case, which began on September 12, 2023. The analyst said on November 27 that the U.S. Department of Justice (DOJ) holds a favorable position against Google in its antitrust trial.
Let’s delve deeper.
Google: The Antitrust Lawsuit
The legal conflict stems from the lawsuit filed by the DOJ and a coalition of states, accusing Google of breaching antitrust laws. The allegations center on Google’s use of restrictive agreements to uphold its market dominance and suppress competition within the search industry. They allege that Google paid billions of dollars to device makers like Apple (NASDAQ:AAPL) and other wireless carriers and browser developers to secure default status for its search engine, thereby adversely affecting its competitors.
Google contends that these complaints lack merit. Moreover, the company asserts that its agreements with device manufacturers and other parties do not impose restrictions on them to promote competitors. Furthermore, Google argues that device manufacturers choose Google as their default search option due to its high quality.
The decision is expected in 2024, and the trial’s outcome remains to be seen. Meanwhile, let’s take a closer look at Google’s legal risks.
Google’s Risk Analysis
Google has a history of grappling with antitrust lawsuits, with several regulatory bodies in the United States and worldwide investigating the company on multiple fronts. These investigations pertain to various aspects, including the operation and distribution of Google Search and its advertising practices.
As it is subject to evolving laws and regulations, TipRanks’ Risk Analysis tool shows that Alphabet’s legal and regulatory risk exposure is higher than the industry average. Notably, legal and regulatory risks account for 20% of its total risks, higher than the industry average of 18.3%.
What is the Prediction for Alphabet Stock?
Alphabet stock has increased by over 53% year-to-date. Despite this ascent, Wall Street remains bullish on Google stock. With 27 Buy and six Hold recommendations, GOOGL stock has a Strong Buy consensus rating. Analysts’ average price target of $153.52 implies an upside potential of 12.54% from current levels.