Alphabet shares jumped 6% in extended trading after a federal judge ruled that Google can keep its Chrome browser while also banning the company from exclusive search contracts.
United States District Judge Amit Mehta delivered his much-anticipated remedy decision on Tuesday, nearly a year after finding that Google illegally monopolised internet search markets.
“Google will not be required to divest Chrome; nor will the court include a contingent divestiture of the Android operating system in the final judgment,” Mehta's ruling read.
“Plaintiffs overreached in seeking forced divestiture of these key assets, which Google did not use to effect any illegal restraints.”
The decision is a significant victory for the tech giant, which had faced calls from the Department of Justice (DOJ) to sell Chrome entirely.
What the DOJ wanted
The DOJ had pushed for what would have been a substantial corporate breakup.
Google faced potential divestiture of Chrome, the web browser that feeds data to its advertising business. The company could also have been forced to sell Android, its mobile operating system used across multiple hardware brands.
That would have intrinsically affected Google's business model, putting at risk its US$26 billion in annual payments - money that flows primarily to Apple for maintaining Google as the iPhone's default search engine.
Wall Street analysts had warned that extended legal battles could weigh on investor sentiment for years, potentially keeping shares under pressure well into 2027.
Verdict
Instead, Mehta stopped short of any structural breakup. Google now must share search data with competitors and cannot maintain exclusive contracts that lock in its search position.
The company can also still pay partners to feature its browser as the default option - just not exclusively.
A subsequent stock rally on the back of the news suggests investors viewed the outcome as less damaging than expected. Apple shares also rose 4%, given the billions it receives annually from Google.
The search giant still plans to appeal, so legal uncertainty remains, yet that did not stop Alphabet's shares rising from US$212 to $229.74 following the ruling.
And a separate ad-tech antitrust case still looms, with analysts warning it "presents a higher probability of a structural breakup" when remedies are decided after September.
