Shares in Google's parent company Alphabet (GOOG, GOOGL) surged by over 5% in pre-market trading after a US federal judge stopped short of ordering the break-up of the tech giant’s Chrome browser or Android mobile platform.
The decision by Judge Amit Mehta follows his earlier ruling that Google violated antitrust laws by maintaining a monopoly in online search. However, the remedies imposed were far less severe than markets had feared.
Mehta rejected the US Department of Justice’s request to force Alphabet (GOOG, GOOGL) to divest its Chrome business. Nor will the company be compelled to sell off Android, the mobile operating system that powers the majority of the world’s smartphones.
Judge Mehta’s ruling “doesn’t seem to be as draconian as the market was expecting,” said Melissa Otto, head of TMT Research, at S&P Global Visible Alpha.
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Still, the judgment imposes constraints. Google will now be required to share certain search data with rivals and will be prohibited from striking exclusive contracts to maintain its search engine’s dominance.
“Today's decision recognises how much the industry has changed through the advent of AI, which is giving people so many more ways to find information,” Google said in a statement after the ruling.
“This underlines what we've been saying since this case was filed in 2020: Competition is intense and people can easily choose the services they want,” the statement added.
Apple shares rose more than 3% in extended trading Tuesday following the federal judge's decision that Alphabet (GOOG, GOOGL) may continue making payments to preload Google Search onto the iPhone.
Although Apple (AAPL) was not a defendant in the antitrust case, its multi-billion-dollar arrangement with Google to keep it as the default search engine in Safari came under scrutiny.
“Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products,” Judge Amit Mehta wrote.
“Cutting off payments from Google almost certainly will impose substantial—in some cases, crippling—downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban,” Mehta said.
Shares in Kraft Heinz (KHC) were down by 7% ahead of the US opening bell after Warren Buffett said he is disappointed in the split that unwinds much of the merger he masterminded a decade ago.
