Alphabet's Legal Headache Isn't Going Away - And Apple Could Be The Wild Card, Says Analyst

Alphabet Inc‘s GOOGL GOOG Google is in ongoing antitrust battle with the Department of Justice (DOJ) and the case just took another turn as the DOJ filed a revised set of proposed remedies.

But according to JPMorgan analyst Doug Anmuth, these changes offer little relief for the tech giant. The DOJ remains firm in its punitive stance, maintaining most of the restrictions from its initial proposal, leaving Google with few concessions under the new administration.

Choice Screens Ban Adds Pressure

One of the most significant blows is the DOJ's decision to prohibit Google from making payments for search distribution via Choice Screens, which Anmuth sees as a clear negative. If upheld, this restriction could force Apple to reconsider its default search provider, potentially opening the door for Microsoft Corp's MSFT Bing, OpenAI, or even an in-house Apple Inc AAPL search engine.

Read Also: Google’s Monopoly Fight Just Got More Intense: Justice Department Reaffirms Plan To Split Up The Tech Giant In Historic Antitrust Battle

AI Divestiture Requirement Dropped, But Strings Attached

The DOJ has softened its stance on one key issue – Google will no longer be required to divest its AI investments.

However, as Anmuth points out, the requirement for upfront notification on future AI investments could still slow Google's ability to compete in the fast-moving AI space.

Apple's Role In Search Could Shift

Anmuth believes that the biggest risk remains whether Google will be barred from offering any value in exchange for search distribution. If this happens, Apple could be incentivized to explore alternatives, reshaping the competitive landscape.

The upcoming court ruling, expected by early August, will determine just how much of an impact the DOJ's remedies will have on Google's bottom line.

What's Next?

With hearings scheduled for late April and May, followed by a final decision in August, Anmuth anticipates a more balanced ruling that considers consumer impact.

However, he warns that even with a more tempered outcome, uncertainty looms over the financial implications, particularly with Google expected to appeal the decision and prolong the legal battle.

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