On Sept. 2, a federal judge published his proposed remedies in the Google Search antitrust case.

Alphabet won’t be required to divest Chrome or Android. The company will not be allowed to have exclusive search agreements and will need to engage in modest data sharing with competitors.

The Google Search case has been hanging over Alphabet’s head. With this ruling, investors can breathe a sigh of relief, knowing that US District Judge Amit Mehta did not propose structural remedies that could have been value-destructive.

Our view, which we iterated in various notes published in August, October, and November of 2024, as well as in February, April, and July of 2025, was largely ratified by Mehta’s decision. We had previously highlighted that the likely remedies would be behavioural in nature.

At the same time, even the imposition of these remedies is not immediate, with an Alphabet appeal to this case likely elongating the process by a few years. This elongation will occur as the search market continues to evolve, likely leading to an overall dilution of the proposed remedies.

Shares now fairly valued

We maintain our $237 fair value estimate as our base-case outlook, as the antitrust opinion published today largely upholds our outlook.

With shares jumping 7% following the decision, we now view Alphabet as fairly valued, with the stock up more than 50% from its April lows.

We believe that with this crucial remedies opinion out of the way, Alphabet can focus more clearly on its search business while aggressively integrating artificial intelligence features as the search market goes through a period of transformation from traditional to AI-first search.

Decision a net positive for Alphabet

Diving deeper into the opinion itself, the key wins for Alphabet are the lack of Chrome and contingent Android divestiture, as well as the no payment ban for default placements. Further, choice screens, a remedy that we thought had a good chance of making the cut, was also dismissed.

We see Alphabet being allowed to self-prefer on its own properties as a win, too, especially considering the US Department of Justice’s proposal, which called for a comprehensive prohibition on self-preferencing.

When it came to actual remedies proposed, Mehta’s ruling can be broken down into four parts.

One, the revenue sharing agreements that Alphabet strikes with companies can only be one year long and cannot be exclusive.

Two, Alphabet must provide a one-time snapshot of its search index and certain user data to its competitors at marginal cost.

Three, Alphabet must provide access to its organic search results to its competitors via an application programming interface for a period of five years.

Four, Alphabet must work with a technical committee to ensure that remedies are enforced for a period of six years.

While we expect these remedies to be diluted as the case progresses to the appeals court and, most likely, the Supreme Court, it is worth noting that these remedies are materially less risky for Alphabet than the RSA, data sharing, search syndication, and oversight remedies proposed by the Justice Department.

For example, Alphabet won’t be required to share sensitive proprietary signals such as popularity and quality, as well as ad data, with competitors, enabling the firm to maintain its “secret sauce” in search advertising, even as it is compelled to share certain data with qualified competitors at marginal cost.

Similarly, while Justice’s proposal called for the periodic sharing of Google’s search index data, including quality and popularity signals, Mehta proposed a one-time requirement, excluding proprietary signals as he sought to minimise the risks of competitors “free-riding” off Google’s search index with little incentive to innovate.

Overall, we believe Mehta’s decision is a net positive for Alphabet investors, as it provides more regulatory clarity while avoiding potentially value-destructive remedies, such as the divestiture of Chrome.

Alphabet (NAS: GOOGL)

  • Moat Rating: Wide Moat
  • Fair Value estimate: USD 237 per share
  • Star Rating: ★★★

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.