Investment firm Barclays has noted growing concern about the ongoing Department of Justice antitrust lawsuit against technology giant Google (NASDAQ:GOOGL). Shares of Google edged higher in Wednesday’s trading session.
Analyst Ross Sandler captured this concern in a note, saying the investment firm has followed the antitrust closely for weeks. According to the analyst, the firm is worried about the strength of the DoJ’s case against Google.
Indeed, the firm believes key witnesses who have testified on behalf of the DoJ against Google have strengthened the agency’s allegations. In addition, the firm said another vital evidence in DoJ’s arsenal is a letter sent by a former general counsel at Google to Microsoft (NASDAQ:MSFT) in 2005. The counsel in the letter said Microsoft making MSN the default Internet Explorer was a possible antitrust violation.
The DoJ alleges that Google’s deal with Apple (NASDAQ:AAPL) to make the search engine the default choice on its devices breaches antitrust laws. Furthermore, the law enforcement agency said Google’s dominance, ensured through the deal with device manufacturers and wireless carriers, made it hard for competitors to gain market shares.
However, both Google and Apple executives have argued otherwise. Notably, they stated that other search engines have sizable market shares and even compete with Google for dominance. In addition, Apple executives said the company chose Google because it was the best option.
Despite these arguments, Barclays noted a survey showing that most iOS users in the U.S. have no idea who their search engine provider is. Furthermore, Google’s internal data revealed that 75% of users do not switch their search engine, even though it was possible.
Should the DoJ win the case, Sandler said device makers may have to implement a choice screen for search providers. However, the analyst stated that might not shift market dynamics, as most users may end up choosing Google.
What is the Future Price of GOOGL?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 21 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average GOOGL price target of $153.96 per share implies a 23.36% upside potential.
