Google shares drop amid UK antitrust lawsuit

Investing.com -- Google parent Alphabet Inc. (NASDAQ:GOOGL) stock fell 2.2% in premarket trading following news of a class action lawsuit in the U.K. that could result in damages exceeding £5 billion ($6.6 billion). The tech gian is accused of abusing its dominance in the online search market, leading to higher prices and stifling competition.

The lawsuit, filed on Wednesday in the U.K. Competition Appeal Tribunal, asserts that Google has maintained its market position by entering into contracts that pre-install its search engine and browser on Android devices, and by paying Apple (NASDAQ:AAPL) to set Google Search as the default on iPhones. These actions are alleged to have cemented Google’s status as the primary platform for online search advertising, while actively excluding other search engines from the market.

Cantor Fitzgerald analyst Deepak Mathivanan commented on the situation, maintaining a Neutral stock rating but reducing Google’s price target from $200.00 to $159.00. Mathivanan stated, "On the Antitrust front, we do not see the possibility of favorable settlements for GOOGL during the remedy trial phase in the next few months."

The lawsuit adds to a series of antitrust challenges Google has faced globally, as regulators scrutinize the company’s business practices. The outcome of this legal action could have significant implications for Google’s operations in the U.K. and potentially influence antitrust enforcement in other jurisdictions. Investors are closely monitoring the situation, as reflected in the stock’s premarket performance.

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