Google’s breakup is starting to get priced in
Subscribe to enjoy similar stories. The federal government is a long way from actually breaking Google up. Investors are starting to treat the possibility as a foregone conclusion.
The trial for the Justice Department’s second antitrust case against the internet titan started Monday. That comes a month after Google lost the first case, with a federal judge ruling that the company engaged in illegal practices to maintain its dominance in internet search. The current trial challenges Google’s position in the ad-tech industry, where the company’s tools play a major role in the buying and selling of online advertising.
The first case could result in an order to separate the search business from the company’s Android and Chrome platforms. In the second case, the government is seeking an order that would force Google to divest itself of its ad-tech services. Threats of government crackdowns have swirled around Google and its big tech peers for years now.
That has done little to dent their business momentum or appeal to investors; the combined market capitalizations of Apple, Microsoft, Amazon, Google-parent Alphabet and Facebook-parent Meta Platforms totaled a little over $12 trillion by the end of June—up 146% from the beginning of 2020. That is more than double the S&P 500’s performance in that time. But Google’s parent has recently broken from that pack.
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