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Despite the Department of Justice’s (DOJ) recent antitrust victory over Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Wedbush’s Dan Ives has forecasted that a breakup of major tech companies is “highly unlikely.”
What Happened: Ives, in a note to investors seen by Benzinga, stated that despite the DOJ’s recent antitrust win against Google, the likelihood of major technology firms being broken up is slim. The analyst acknowledged that while regulatory scrutiny of Big Tech is on the rise, the dismantling of these companies’ business models is “highly unlikely down the road.”
This comes in the wake of a U.S. District Court ruling that found Google had monopolized to maintain its dominance in search engines. Bloomberg reported that the DOJ might consider a breakup of Google as one possible solution.
Ives referred to the DOJ’s win as “a huge notch on the belt” for regulators and predicted an increased focus on other tech giants such as Apple Inc., Amazon.com Inc., and Meta Platforms Inc. However, he anticipates that Big Tech’s business models will remain “relatively insulated for now.”
The analyst expects “business model tweaks and heavier scrutiny of M&A” rather than complete breakups. The Wedbush note also pointed out that legal battles could drag on for years, with Google already planning to appeal the recent ruling.
Google did not immediately respond to Benzinga’s queries.
Why It Matters: The DOJ’s consideration of a breakup bid for Google would be the first attempt to dismantle a company for monopolization since a similar unsuccessful attempt was made with Microsoft over two decades ago.
Adding to Google’s woes, the company’s AI assistant Gemini experienced two consecutive glitches during a live demonstration at the “Made by Google” event. This incident highlighted potential issues with Google’s product offerings, further complicating the company’s standing amidst the ongoing antitrust scrutiny.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image via Shutterstock
