Alphabet’s Antitrust Iceberg: The Global Fronts No One Is Pricing In

 | Jul 09, 2025 12:09PM ET

Retail investors still largely anchor their risk lens on Alphabet to the ongoing antitrust war with the U.S. Department of Justice. But while that courtroom battle has drawn headlines and models estimating up to a 25% valuation haircut, it’s only the tip of a much larger, more dangerous legal iceberg.

Alphabet is now entangled in a multi-jurisdictional assault spanning the EU, U.K., and other legal regimes. And while markets continue to treat these risks as footnotes, the consequences – financial, structural, and reputational – are anything but.

Let’s break down the fronts Alphabet Inc Class A (NASDAQ:GOOGL) now faces beyond Washington.

Front #1: Europe’s Record Blow – and What Comes Next

In 2018, the European Commission levied a record €4.3 billion ($4.7B) fine against Google, charging it with illegally using Android’s dominance to cement its apps’ pre-installation. Fast-forward to 2025, and the verdict is only getting worse for Alphabet as the European Court of Justice (aka ECJ) is set to finalize its ruling in the coming few months. By the way, the ECJ’s Advocate General Juliane Kokott has already advised judges to reject Google’s appeal. Historically, the court sides with its advocate general about 80% of the time.

The fine has already been slightly reduced to €4.125 billion in 2022, but that’s hardly relief because EU competition law allows for penalties up to 10% of a company’s global annual revenue, and Google – in the eyes of Brussels regulators – seems to remain a repeat offender.

Meanwhile, Alphabet isn’t waiting for the hammer to fall. On July 2, it proposed new changes to its search engine in a bid to avoid additional fines. The company’s latest "Option B" suggests creating a prominent box linking to vertical search competitors – hotels, flights, restaurants – above Google’s own listings. That’s a seismic shift in a business where placement is power.

But few expect this to satisfy the Commission. Alphabet’s (NASDAQ:GOOGL) previous remedies were already deemed insufficient, and the mood in Brussels is increasingly hawkish.

Front #2: U.K. Watchdog Has the Tools – Though Yet to Use Them

Across the channel, the U.K. Competition and Markets Authority (CMA) has quietly built an arsenal to challenge Big Tech dominance. In theory, its proposed “strategic market status” designation would allow the regulator to force Alphabet to adjust how it ranks results or offers rival services more visibility.

But execution tells a murkier story. While the CMA has proposed measures – like a choice screen for search engines and changes to Google’s result rankings – it remains unclear whether it has the political will to enforce them.

Adding complexity: the CMA chair is a former Amazon (NASDAQ:AMZN) executive, and Big Tech remains one of the largest investors in post-Brexit Britain. Google warned it may withhold new products and services from the U.K. market if regulations become overly aggressive – a threat the CMA cannot easily ignore, given the 200,000+ British businesses that rely on Google ads.

So far, the CMA’s bark seems louder than its bite. It famously blocked Microsoft’s $69B Activision-Blizzard acquisition in 2023 – only to reverse itself months later. Whether it will hold the line against Google remains to be seen, but it should be considered in the context of other cases.

Front #3: Emerging Markets, Coordinated Pressure – New, Dangerous and Global Legal Frontier

A far more novel threat to Alphabet’s stability is quietly emerging outside the traditional Western legal framework. In South Africa, the Competition Commission has concluded a sweeping inquiry into platform dominance and issued provisional findings that could reshape Alphabet’s business there – and elsewhere. The report charges that Google’s algorithms systematically disadvantage local news providers, promoting global outlets while underrepresenting South African and indigenous-language content.

The proposed remedy? Annual compensation of R300–500 million (~$16–27 million) to local news publishers, as well as a 5–10% revenue levy on digital advertising if compliance falters. Final rulings are due this year, and the outcome could be a blueprint for other developing markets.

Another part of the problem I had overlooked myself is that South Africa isn’t acting in isolation. Russia, often dismissed due to sanctions, is now part of an unsettling trend. For those who missed it – as I did – in 2022, Russia’s antimonopoly regulator completed an investigation and concluded that Google (YouTube) had abused its dominant position in the video hosting market. The company was ordered to amend both YouTube and Google’s Terms of Use to address the violation. Notably, this marked the first time a regulator successfully concluded an investigation specifically targeting YouTube, whereas most other cases have focused on advertising, preinstallation, and search practices.

As a result of the case, Google has already quietly paid out $320 million in legal settlements there for violating antitrust laws and failing to pay the initial fine on time – an expense that never made major headlines. But Russian litigants are not stopping at symbolic victories; they’re now pursuing enforcement in jurisdictions far beyond Western regulatory reach. From a legal standpoint, the total penalty could scale up to the full market capitalization of the defendant – meaning Alphabet could risk losing around $2 trillion.

Here’s the inflection point: a South African court has authorized the provisional seizure of Google’s assets at the request of Russian claimants. Similar motions are pending in Brazil, Turkey, and Egypt. If this coalition-style legal maneuvering proves effective, Alphabet could be vulnerable to compound exposure – paying multiple times for parallel claims across disconnected regimes.

What began as niche legal friction now threatens to become a globally coordinated asset siege.

Your Takeaway

The antitrust debate is no longer confined to Washington courtrooms. It’s happening in Pretoria, in Brussels, in London – and increasingly, in ways Wall Street hasn’t yet priced in. What’s emerging is a multi-front legal war, where every front – EU, U.K., emerging markets, and international asset enforcement – adds not just cost, but structural fragility.

The historical price-to-earnings multiples of 25-30x seem like a distant memory – in this new reality of capped growth and ballooning contingent liabilities from every direction, a forward multiple closer to 18x seems far more appropriate. Applying such a multiple to consensus EPS estimates for 2026 – and factoring in a conservative discount for these compounding risks – suggests a fair value that offers little to no upside from the stock's current price.

The current neutral narrative may continue to dominate headlines, but it’s these under-the-surface battles – legal, global, and accelerating – that may quietly reshape Alphabet’s valuation.

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Boris Dubov

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