By Adam Levine

If Big Tech investors were looking for signs that the Justice Department under Donald Trump's presidency would take a hands-off approach to antitrust issues, they're likely to be disappointed.

Last August, Google lost a landmark antitrust trial. Originally filed late in the first Trump administration and continued under Biden, the Justice Department had pushed for a breakup of the search giant, and other punitive measures. On Friday evening, the DOJ under new Attorney General Pam Bondi filed a revised set of proposed remedies in the case while still calling for a breakup.

The latest call for antitrust enforcement isn't helping stocks. Amid the market's broad selloff Monday, Big Tech companies were hit particularly hard, with shares of Google-parent Alphabet closing down 4.4%, near the average for the group. The tech-focused Nasdaq 100 index was down 3.8%, while the large-cap S&P 500 was off 2.7%.

The Justice Department still wants Google to stop making default search engine payments and other self-preferential deals. It is still requesting that Chrome be divested. It still wants to see Google forced to share and syndicate data and search results. There is still the compliance committee with broad powers, including access to Google's crown jewel assets, its source code and algorithms.

U.S. District Judge Amit Mehta will soon be weighing the penalty phase of U.S. v. Google, taking the government's view into consideration, as well as Google's response. A 2-week argument is scheduled for April, with a decision handed down over the summer.

On Monday, Google spokesperson Peter Schottenfels told Barron's, "DOJ's sweeping proposals continue to go miles beyond the Court's decision, and would harm America's consumers, economy and national security." Appeals are likely to delay any remedy for several years.

To be sure, there is some good news for Google in the latest government filing. The DOJ is no longer asking for Google to be required to divest its interest in any sort of potential competitors, including AI companies that could be entrants into the general search engine business. That's likely to be viewed positively by Google's legal team.

But the revised Bondi proposal doesn't remove the government from these potential transactions. New investments in this area would require approval from the Justice Department and the Federal Trade Commission. Such reviews could inject politics into future M&A from Google.

Apple could also be impacted by the changes in the latest DOJ memo. The iPhone maker received $20 billion from Google in 2022 in return for making Google Search the default search engine on Apple devices. The payment totaled about a quarter of Apple's overall services revenue. Were Apple to lose the payment, there could be severe consequences for the stock. Because Apple has so much at stake, it filed a motion to become one of the parties in the case, but Judge Mehta denied it.

Apple shares closed down 4.8% on Monday.

Under the new proposal, Google would still be prohibited from making payments for the default search setting, but it wouldn't be stopped from making other types of payments to Apple. The change could open up a means of circumventing the prohibited payments, and here the enforcement mechanisms would be key, opening up another avenue for political concerns to seep in.

There was also a change to the Android section of the proposal that makes divestment of the mobile operating system less likely, and minor adjustments to other parts.

Much has changed in Washington since the November election, but when it comes to Big Tech the status quo seems to reign. Investors are taking notice.

Write to Adam Levine at adam.levine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 10, 2025 16:29 ET (20:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.