Increased antitrust scrutiny against big tech companies forces us to take a hard look at the Justice Department’s lawsuit against Alphabet (GOOGL) and the potential implications for this Club participation and other mega caps.
Jim Cramer spoke Monday with Jonathan Kanter, assistant attorney general for the Justice Department’s Antitrust Division, in an exclusive “Mad Money” interview. While Kanter said he couldn’t comment on the government’s case against Alphabet because it was ongoing, he did offer some insight into how it’s enforcing antitrust law in today’s marketplace.
Kanter emphasized, more broadly, that he is investigating cases to “determine whether the conduct that one company is engaging in is preventing others from competing effectively without providing benefits to market participants.” Kanter left no doubt that if she believes a company is exhibiting classic monopolistic practices as defined by the Sherman Antitrust Act, she will go after it until management changes its ways.
As Kanter said, “Does it lessen competition or tend to create a monopoly?” If, he continued, any of the risks are present, the department will initiate a case against the company. His case explores a variety of ways that Alphabet has thwarted the online advertising market to the detriment of both advertisers and publishers.
While Kanter made it clear there could be no direct comment on the case, Jim Cramer believes it was something that hurt the Charitable Trust’s valuation of this name. Jim and Jeff Marks intend to discuss what Kanter’s general comments mean for Alphabet and others in what he calls the Magnificent Seven in their morning meeting tomorrow at 10:20 ET.
(Jim Cramer’s Charitable Trust is GOOGL long. See here for a full list of actions).
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