Shares in U.S. tech giant Alphabet-owned Google (GOOGL) were higher today despite a threatened crackdown on its search services in the U.K.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
Limited Fairness
The U.K.’s Competition and Markets Authority (CMA) said it is investigating Google’s search activities under the country’s new Digital Markets Competition Regime.
The CMA said it was not accusing Google of anti-competitive practices at this time, but said it was concerned about the higher costs of search advertising than would be expected in a more competitive market and the limited transparency and fairness in how Google ranks and presents search results.
It added that default agreements with mobile device manufacturers can also make it more difficult for competitors to reach customers.
It will decide on whether to” introduce targeted measures to address specific aspects of how Google operates search services in the U.K.” in October.
These could include requiring “choice” screens for users to access different search providers as well as more transparency and control for publishers whose content appears in search results. Ensuring fair and non-discriminatory ranking of search results is also a priority.
Vital Services
It said that Google accounts for more than 90% of all general search queries in the U.K. with more than 200,000 businesses in the U.K. relying on Google search advertising to reach their customers. According to the CMA “these services matter to our economy and society – so it is vital that competition works well.”
Sarah Cardell, chief executive of the CMA, said: “Google is the world’s leading search tool and plays an important role in all our lives, with the average person in the U.K. making 5 to 10 searches a day. Google search has delivered tremendous benefits – but our investigation so far suggests there are ways to make these markets more open, competitive and innovative.”
Alphabet, said the CMA’s suggestions were “broad and unfocused” but added it would “work constructively” with the regulator.
It adds to growing pressure on the company, and other U.S. tech titans, in Europe over competition concerns in areas such as search and apps.
Is GOOGL a Good Stock to Buy Now?
On TipRanks, GOOGL has a Strong Buy consensus based on 29 Buy and 9 Hold ratings. Its highest price target is $250. GOOGL stock’s consensus price target is $199.11 implying an 20.53% upside.
