"US DOJ Lawsuit Has Serious Flaws" Emphasized
No Major Shock in Market...Parent Company's Stock Price Rises
[Asia Economy Reporter Hyunwoo Lee] Google, a defendant in the U.S. Department of Justice's antitrust lawsuit, is strongly opposing the case, claiming the lawsuit itself is invalid. They argue that their platform did not coerce consumers into use nor was there a lack of alternatives, so there was no abuse of monopoly power. However, following the government's announcement of the antitrust lawsuit, the stock price of Google's parent company, Alphabet, closed higher.
According to foreign media including The New York Times (NYT) on the 20th (local time), Kent Walker, Google's Chief Legal Officer (CLO), stated in a press release that "The U.S. Department of Justice's antitrust lawsuit has serious flaws," and "People choose Google voluntarily, not because they are forced or unable to find alternatives." Google maintains that it has never abused its high market share or engaged in conduct violating antitrust laws, thus the DOJ's lawsuit itself is invalid.
Contrary to Google's strong opposition, the market reaction was rather calm. On the day, Alphabet's stock price closed at $1,551.08, up 1.38% from the previous day. In the U.S. stock market, it is expected that this case will have little impact on the market, similar to the 1990 antitrust lawsuit by the DOJ against Microsoft (MS). In 1990, the U.S. Federal Trade Commission (FTC) launched an investigation into MS's 'Windows 95' operating system, which controlled over 95% of the PC market, on antitrust allegations. The DOJ filed an antitrust lawsuit and ordered a corporate breakup. However, in 2001, the U.S. court dismissed the breakup order, and it did not significantly affect MS.
According to CNBC, Brent Thill, an analyst at U.S. investment bank Jefferies, said, "It is indeed an important lawsuit, but it is expected to unfold over a long period like the MS case, and the MS lawsuit ultimately had little impact on MS's operations." He added, "It will not have a major effect on investors either."
Previously, in 2017, Google was fined €8.25 billion (approximately 11 trillion KRW) by the European Union (EU) for abusing its dominant market position. However, its online advertising revenue alone reached $135 billion (approximately 153.441 trillion KRW) last year, so the impact on performance was minimal.
There were also positive reactions in Congress. Senator Josh Hawley, former Attorney General of Missouri, said, "This lawsuit shows the growing dissatisfaction with tech companies," and added, "It is exciting to see the U.S. versus Google dynamic."
The industry itself is also welcoming the move. Business search company Yelp called it an "important first step." The company has long expressed dissatisfaction with the bias in Google's search results. Luther Lowe, Yelp's Senior Vice President, said, "We applaud the DOJ's lawsuit and support the actions of state attorneys general who are also investigating other aspects of Google."
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