Google’s earnings appeared adequate on Wednesday to see it outperform Meta Platforms (META) for the rest of the week. However hidden within the earnings report was this little gem: Alphabet, finest often known as Google, GOOG remains to be going through an unrelenting onslaught of lawsuits from quite a few international locations. Might this be a severe headwind versus its rivals?
The corporate stated that complete working bills elevated 20% within the second quarter to $26.1 billion. “The most important driver of that was bills for authorized and different issues, which mirrored the impression of a $1.4 billion cost associated to a settlement in a authorized case,” famous Anat Ashkenazi, senior vp at Alphabet and Google throughout the earnings name on Thursday. “Working margin was flat year-on-year at 40.1%…partially offset by the authorized cost,” he stated.
Google’s 10-Q submitting discloses a variety of authorized proceedings starting with the European Fee’s (EC) 2017 lawsuit and ensuing $3 billion positive and ending with two 2024 EC instances towards it, the place the corporate says they can’t even “estimate a attainable loss.”
Within the first quarter of the 12 months, Google confirmed a 17% annualized improve in Common and Administrative prices, with the second quarter rising a bit extra. Authorized dangers to Google are actually a number of the worst going through Massive Tech. They’re shedding instances, absorbing fines, and paying settlements.
The newest main authorized case Google misplaced is a federal antitrust ruling in April 2025, the place U.S. District Choose Leonie Brinkema discovered that Google holds an unlawful monopoly in two internet marketing markets. The courtroom dominated that Google violated U.S. antitrust legal guidelines by willfully buying and sustaining monopoly energy over elements of the digital promoting ecosystem, particularly tying its advert server and advert alternate companies in violation of the Sherman Act – the nation’s premier financial equity legislation.
That ruling was Google’s second important antitrust loss in underneath a 12 months. There are fixed rumors flying of it being damaged into items, although some say this will likely be excellent news for Google shareholders.
“Breakups usually promise to unlock shareholder worth in idea however fail in observe, this case seems to be an exception, one the place actual worth could possibly be realized,” Gene Munster, managing accomplice at Deepwater Asset Administration, was quoted saying by well-known Google beat author David Streitfeld at The New York Occasions on June 2.
Russia, Turkey, UK Comply with EU With Google Lawsuits
Google lawsuits are trending within the improper path for Alphabet traders.
Of their 10-Q, Google says {that a} case in Russia is unlikely to have a materially adversarial impact on their backside line, however the firm nonetheless faces a staggering dispute towards 17 Russian TV networks over the elimination of their YouTube channels. Alphabet owns YouTube.
The full quantity of fines imposed on the corporate by Russia stands at roughly 46 billion rubles, or round $580 million.
Google has already paid round 25 billion rubles ($325 million) – 13 billion rubles ($163 million) reported by Russian information publishers Izvestiya and 7 billion rubles ($88 million) reported by the Interfax newswire, and 5 billion rubles ($63 million) extra in line with publicly out there data.
Though Google downplays this authorized danger, the political surroundings in Russia makes it extra unsure. Courts have beforehand frozen billions in native property of overseas firms. As an example, a Russian courtroom froze $1 billion in native property linked to UniCredit final 12 months, in addition to to Germany’s Deutsche Financial institution AG and Commerzbank AG.
Google is underneath rising authorized and regulatory scrutiny regardless of the place you look:
- Danger of $35 billion in different EU fines, with Google admitting it did not resolve discord, Reuters reported on July 9.
- Google is more likely to lose its attraction of the EU’s 4.3 billion euro Android positive (remaining ruling anticipated quickly).
- A $314 million jury verdict in California over misused cellular phone knowledge.
- U.S. antitrust trial with Texas might result in over $100 billion in potential penalties for advert tech illegal dominance.
- New EU criticism from publishers over AI Overviews misusing internet content material.
- Extra “mammoth complaints” within the UK, Turkey and South Africa.
Google didn’t return a request for remark made Thursday throughout market hours.
Different international locations are smelling blood within the water round Google. However there’s excellent news for Alphabet.
Meta Platforms has been a greater funding for Massive Tech holders, with Google underperforming the QQQ for the final 12 months. Google trades at decrease multiples, and often outperforms the Nasdaq, setting the desk for a Google run to catch its friends.
Google is Loaded. However Meta Outperforms.
In 2024 alone, Google was fined almost $2.9 billion (primarily from antitrust penalties), in line with Proton’s tech fines tracker. Some examples embody a $700 million settlement in late 2023 resolving an all-50-state antitrust lawsuit over Google’s Play Retailer practices, and a document $1.375 billion privateness settlement with Texas in 2025 for alleged illegal knowledge monitoring. Google additionally settled a 40-state location-tracking case for $391.5 million in 2022, based mostly on Proton’s tech fines tracker.
Regardless of billions in fines, Alphabet’s working bills can cowl it. That they had about $208 billion in working bills in 2022, then $223 billion in 2023 and rising barely to $237.6 billion in 2024. This implies Google’s authorized payouts are on the order of 1% or much less of its yearly working prices.
In the meantime, Meta’s authorized bills are additionally substantial, however its expense base is smaller than its Massive Tech rival.
The most important current hit was a $1.4 billion settlement with Texas, introduced final 12 months, over Fb’s previous use of facial recognition with out consent. That was their largest-ever positive imposed by a state, and proper round what Texas charged Google.
In Might 2023, the EU fined Meta 1.2 billion euros for violations in knowledge transfers – the most important positive underneath Europe’s digital safety guidelines on the time. Google seems to be able to double that payout to the EU, nevertheless, when contemplating the large Android case alone.
Yr up to now, Meta is up 22% and Google is way behind, up underneath 2%. Meta is up over 55% within the final 12 months, with Google up 11%. Google can also be trailing far behind the Nasdaq, as measured by the Invesco Nasdaq Belief (QQQ) ETF.
Because of this, Google shares are cheaper than Meta. Google trades at ahead value to earnings of 20.6 instances whereas Meta traders can pay 27.9 instances for a reasonably comparable product line, and an identical AI sidebar play. And fewer authorized danger.
Benzinga Disclaimer: This text is from an unpaid exterior contributor. It doesn’t signify Benzinga’s reporting and has not been edited for content material or accuracy.