Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) CEO Sundar Pichai avoided detailing the company’s contingency plans if its search partnership with Apple Inc. (NASDAQ:AAPL) ends.
However, he cautioned that the Department of Justice’s proposals could lead to “unintended consequences.”
What Happened: During Alphabet’s third-quarter earnings call on Tuesday, Barclays analyst Ross Sandler questioned Google's backup plan amid the ongoing DOJ antitrust trial.
He pointed to the risk of Google losing its contract with Apple and some Android pre-install agreements if the trial doesn't go in its favor.
In response, Pichai declined to speculate on the matter due to the ongoing litigation but underscored Alphabet’s commitment to innovation and making its products easily accessible across all platforms.
“People have chosen us because they view it as the best product, be it consumers or partners. And we have a long track record of working hard to make sure our products are as easily available to users as possible across all platforms,” he stated.
The CEO also expressed concerns about the DOJ’s early proposals, stating they could have “unintended consequences” for the dynamic tech sector and American leadership in the field.
“We plan to vigorously defend these cases. And some of the early proposals from the DOJ, et cetera, have been far-reaching,” Pichai said.
Why It Matters: The U.S. Department of Justice (DOJ) is currently engaged in significant legal actions against Google following a ruling that found the tech giant guilty of maintaining an unlawful monopoly in the online search market.
The DOJ is weighing proposals that could break up Google as an antitrust remedy after a court found the company abused its dominance in search for over a decade, largely through exclusive deals with Apple and Mozilla.
The DOJ is also scrutinizing Google's influence in the growing generative AI market, fearing it may use its search dominance to monopolize this space as well.
In May, during the antitrust lawsuit against Alphabet, it was disclosed that Google paid Apple an astounding $20 billion in 2022 to remain the default search engine on the Safari browser.
Previously, an analyst at Jeffries suggested that Google’s deal to be the default search engine on Apple iPhones is “very likely” to be banned.
Meanwhile, Alphabet has reported a 15% year-over-year increase in third-quarter revenue, beating Street consensus estimates.
Price Action: As of this writing, Alphabet’s Class A shares surged 5.80% in after-hours trading to $179.52, while Class C shares jumped 5.89% to $181.22. During the regular session, Class A shares closed at $169.68, and Class C shares at $171.14, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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