There judgment of the Court of Justice American against Google has shaken the economic and financial news in a sultry beginning of August, casting a shadow over the rally sustainability that led Big Tech to reach hundreds of billions of dollars in capitalization and the US market to repeatedly update historical records. But why is the Google ruling so important? And what is expected for the future in the financial sector? Analysts at Moneyfarmin fact, they analyzed the story and scaled down the alarm initial.
The Google ruling
In August, Judge Amit P. Mehta of the U.S. District Court ruled that the tech giant acted illegally to ensure the maintenance of a monopoly in search engines and to do so it has paid billions of dollars to Apple, Samsung and Mozilla to ensure that it is the default search engine on both Apple and Android devices.
A conduct that had already been deemed illicit four years earlier by the US Department of Justice and which allowed Big G to multiply its profitsLosing this position could result in a sharp drop in revenue and heavily impact the profit, but there are also those who speak of a Alphabet “stew”Google’s parent company. The courts have yet to decide anything on the matter.
The contaminations of politics
The sentence – Moneyfarm recalls – comes at a very specific historical moment: in the United States, in fact, there is a fairly broad political consensus on the excessive power exercised by Big Tech, even if both republicans both the Democrats tend to think that tech giants favor the opposing political camp.
Antitrust inaction
“In recent decades, the antitrust issues they were largely neglected in the United Statesallowing large companies to grow undisturbed”, explain the experts at Moneyfam, indicating that this trend “has only recently been reversed, with the Biden administration’s decision to more severely pursue companies that abuse their market power, limiting consumers’ freedom of choice”.
Hence the start of some five antitrust actions towards Big Tech as Google, Amazon, Apple and Metawhich at the moment they only leave Microsoft outdespite the fact that judges had already requested its dismemberment in the 1990s for abuse of market position (a ruling against which the Redmond giant successfully appealed) and today it has reached record dimensions.
What impact on the markets?
“Often investors do not seek competitiveness – Moneyfarm experts underline – but prefer sustainable monopolies and the new, more stringent US antitrust regulation could impact on walletsreducing the share of Big Tech profits. However, while the government will likely take a more intransigent stance towards companies with very high market shares, on the other hand the Big Tech they could put in place a series of lobbying actions and concessions to protect their positions.”
A “legal” arm wrestling that could see coming out US government defeatedespecially since a survey conducted earlier this year among US antitrust professors revealed that few are convinced that Washington will emerge victorious from all (or at least most) of the five ongoing lawsuits against the tech giants.
“Although US regulation is set to become more stringent – analysts say – we believe it is too early to fear a collapse in profits of large technology companies. There is still a long way to go and there are many countermeasures that these companies could take to reassure investors“.
