Why Alphabet Stock Is Sinking Today
Key Points
The European Commission has announced another investigation of Google.
This time, they're concerned about how Google ranks websites that use sponsored content.
Potential fines on Alphabet could exceed $77 billion.
- 10 stocks we like better than Alphabet ›
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock slumped 2.1% through 12:30 p.m. ET Thursday -- and it's not hard to figure out why.
This morning, the European Commission (E.C.) cited the European Union's Digital Markets Act (DMA) in announcing formal proceedings "to assess whether Google applies fair, reasonable, and nondiscriminatory conditions of access to publishers' websites on Google Search." It's this fear of litigation that has investors spooked about Google parent company Alphabet today.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Is the E.C. mad at Alphabet?
The E.C. says Google's "site reputation abuse policy" punishes news media and other websites when those websites include content from commercial partners. Google argues this policy discourages publishers from manipulating their rankings in search results, but the EC thinks sponsored content may be a legitimate business practice that Google is impinging.
Mind you, the EC only thinks this, and may take the next 12 months to make up its mind. If it decides against Google, though, the EC has the power to fine Alphabet "up to 10% of the company's total worldwide turnover," and potentially "up to 20% in case of repeated infringement."
Alphabet did $385.5 billion in turnover (i.e., revenue) last year. That works out to potential fines as high as $77.1 billion!
Is Alphabet stock a sell?
That's almost certainly not going to happen. Worst-case scenario, even if the E.C. finds against Google/Alphabet, the company could simply change its policy to align with the E.C.'s view of what it's allowed to do, and stop doing what it's not allowed to do.
Still, the E.C. investigation highlights the risk of Alphabet having to do business in Europe, where it's considered something of a monopolist, and subjected to heightened scrutiny of all its actions. That's a risk investors need to bear in mind constantly.
Should you invest $1,000 in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $624,230!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,187,967!*
Now, it’s worth noting Stock Advisor’s total average return is 1,069% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of November 10, 2025
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
Recommended Articles
