Google vs DoJ: Who Wins? Via Investing.com

As Google faces off with the Department of Justice (DOJ) over antitrust concerns, the outcome of the battle could reshape the tech landscape and impact the company’s future.

Analysts from JMP Securities, Mizuho and Barclays analyzed the possible scenarios and their implications:

Analysts at JMP Securities anticipate that the DOJ may impose remedies, such as requiring OEMs and browsers to present a choice screen for default search engines.

They explain that this could benefit Google, as its superior search quality could help it retain significant market share despite increased competition.

“We would assume that OEMs and browsers are required to present a list of default options,” noted analysts at JMP Securities, suggesting that approach would be the most likely outcome.

While this could hurt Google, the firm maintains its bullish stance, citing the company’s strong position in AI and YouTube. However, analysts warn that if regulators bar Google from bidding on default search destinations, it could dramatically change market dynamics, benefiting competitors such as Microsoft but potentially hurting Apple and other partners dependent on Google’s sharing agreements of income.

On the other hand, Mizuho analysts believe a Google breakup is unlikely because of the high legal threshold set by historical precedents such as the 1982 AT&T breakup.

“The target for a breakup is quite high,” analysts at Mizuho said, noting that Google’s search dominance does not equate to the vertical control seen with AT&T.

Instead, analysts expect a remedy similar to previous cases, such as a choice screen for search engines, which could preserve Google’s market position.

Analysts at Barclays outline a spectrum of possible impacts, from minimal to significant. They warn that the remedies could cut Alphabet’s (NASDAQ: ) gross profit by as much as 41%, depending on the extent of structural or behavioral changes.

Analysts suggest the most damaging outcomes could involve divesting major assets like Chrome or Android, or severe restrictions on search and ad revenue models.

While the exact resolution remains uncertain, investment banks point out that the DOJ’s actions could lead to significant adjustments with potential long-term effects on its profitability and market strategy.