Everyone Wants A Piece Of Google
Further clarity has emerged about how Google could be barred from merging with and acquiring, smaller firms. After a week of macroeconomic slowdowns, the US stock market might be getting protective of its endangered tech firms.
An anti-trust case arises when a company is sued by its own government for becoming too big and too powerful. Earlier this week, rumours began to circulate that Google, Alphabet’s subsidiary, could be the victim of one of these anti-trust cases. Fast forward to the present, and analysts and market watchers are seeing this as a problem for an economy more and more reliant on the tech industry for growth.
Googles prolific mergers and acquisitions are at the heart of the governments gripe. For Senator Elizabeth Warren and the US Department of Justice, tech has become a ‘winner takes all’ sector. However, according to Moffett Nathanson’s note to investors, with tech companies’ products being free and “creating efficient markets” elsewhere, they have an excellent legal defence. Indeed, Apple, Microsoft, and Facebook have also been the subject of anti-trust cases before, and all these firms have won their cases.
In recent days, however, the market has taken on a new complexion. While growth has become a scarce commodity that tech firms can offer, some analysts including Aaron Kessler of Raymond James, think this is under threat with at-least some government intervention on the cards. He said, “future acquisitions will be much harder to do.” Certainly, with 2020 elections just around the corner and now a Federal Reserve under pressure to cut rates, Google will be used as ammunition for many more market moving ends in the weeks to come.
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