Google, Alphabet, antitrust lawsuit – Jim Cramer et al on impact


The US Department of Justice filed an antitrust action against search giant Google on Tuesday.Five experts explain what the lawsuit means for parent company Alphabet, whether it has merit and how Google will defend itself.

Jim Cramer, host of CNBC’s “Mad Money”, cut holes in the logistics of a split.

“First, it’s done. Second, this is not the first rodeo. They were able to stand up for it over and over and over and over again. There are a lot of documents that are in favor of Google.… If they dismantled the company… What will you get? You will get Waymo. You will benefit from health care. You get fantastic YouTube and you get research. What will they do? Divide the research into what?

Tim Wu, a professor at Columbia Law School, said the chances of a complete breakup are low.

“It’s actually a pretty strong costume as it goes, but the question is, well, what does that accomplish?” And, you know, if they go big to try and get some sort of breakup, that would be a big deal. The Challenge I think for this lawsuit, even though I think they picked their best lawsuit, it’s almost an exact copy of the Microsoft case they won in the 90s. Cures, natural cures are just… don’t make Google the default search engine. And that’s not really going to transform the industry, so I think the odds are actually lower that there’s a real breakdown down the road, but you know like they said … nothing is on the way. table. ”

Luther Lowe, vice president of public policy at Yelp, said the DOJ has a straightforward case.

“When a mom today searches for a pediatrician in New York City, instead of being matched with the best information on the web, which Google’s initial market was like, she’s unwittingly directed to an objectively good set. lower And this type of local search happens literally billions of times a week in the United States. So I think the US government is going to have a pretty straightforward case here in terms of direct empirical evidence of harm to consumers. ”

Stephen Houck, former head of the antitrust bureau in the New York State Attorney General’s office, outlined the differences between this lawsuit and the one against Microsoft in the 1990s.

“We haven’t seen the complaint yet. I’m sure Google will reject it. Unlike Microsoft, the problem here from the very beginning has been the lack of damage to consumers. Google’s products are popular with consumers. They are Unlike the Microsoft case where Microsoft’s whole goal was to allow itself to continue charging high monopoly prices … [these are] very different cases. The behavior is apparently going to be alleged, it’s also very, very different. Much more serious in the case of Microsoft. ”

Brian Nowak, senior internet equity research analyst at Morgan Stanley, said Google has already suffered a similar scenario in Europe.

“The three things that really stand out to me from this situation are # 1, it will be a long process, and this process will take years, not quarters, probably to come to a resolution. , as part of this multi-neighborhood, potentially year-long, political, political and negotiating process … it’s not clear what kinds of changes Alphabet or Google need to make to their commodities and how we think about the financial impact real of these changes. And I would say point three, we’ve been through a version of this before with search in Europe, especially in 2018 where the European Commission forced Google to adjust their practices and the way they manage the Android ecosystem, basically. , allowing non-Google search engines in Android, in this ecosystem. And what we’ve seen based on this case study at least is that the real growth trajectory of Google search revenue in Europe, we don’t really think has been significantly affected. ”



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