Alphabet Inc. (NASDAQ:GOOGL) has challenged two European Union orders that would require Google to give AI companies access to its services and search competitors access to its search data, according to a Reuters report on September 29.
Google argues the measures would undermine user privacy and security. The orders fall under the Digital Markets Act, and the changes they require are due to take effect in 2027.
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Alphabet is Defending the Data its Results are Built On:
What the EU is asking for goes further than previous remedies, which is why this is being litigated rather than absorbed. Earlier antitrust cases in Europe changed how Google displayed results or how it charged. These orders would require it to hand rivals the underlying search data, which is the raw material the ranking system is built on.
That data is the moat. The EU’s contention is that query history is what makes the results good, and that a competitor given access to it would start much further along than it otherwise would.
The timing matters more than it would have five years ago. AI companies are building products that answer questions directly, and access to Google’s query data would make those products materially better.
That is why the order lands differently now. A remedy designed to help rival search engines arrives at the moment a different kind of competitor could use it more effectively.
Alphabet can afford a long fight. It generated roughly $445.87 billion of revenue over the past twelve months at a 34.03% operating margin, and holds $242.47 billion of cash.
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Structural Remedies Cannot be Settled With Cash:
The difficulty is that Google is contesting rules rather than a penalty. Fines are survivable for a company this size. Structural obligations are different, because they change what the business is allowed to keep to itself, and no amount of cash resolves them.
Privacy is also an awkward argument to lead with. Google’s case is that sharing data would expose users, and the same company collects that data in the first place and monetizes it thoroughly. The Commission has not said how it will treat the point.
Europe is not the whole problem either. Any remedy that works in one jurisdiction becomes a template, and regulators elsewhere watch what the EU does.
The 2027 start date matters for that reason. It gives Google time to litigate, and it gives every other authority time to see whether the approach holds.
Investors are not pricing much of this. Alphabet was worth about $4.1 trillion, and the shares have gained more than 40% over twelve months while these orders were being drafted. Nothing in that suggests the market regards the outcome as a threat to earnings.
Conclusion:
Google is defending the asset rather than the revenue, because query history is what makes its results better than anyone else’s, and handing it to rivals would narrow that gap permanently. The company also has the cash to litigate for as long as it takes. However, this is a fight about obligations rather than fines. The privacy argument also sits oddly coming from the largest collector of the data in question, and a remedy that survives in Europe is likely to be copied elsewhere.
What the Price Assumes:
Alphabet closed at $344.08 on September 30, more than 40% higher than a year ago. Revenue grew 24.20% in the most recent quarter. The valuation is harder to read than it first appears. The shares trade near 17 times trailing earnings but close to 22 times what analysts forecast for next year, which means reported profit is expected to fall rather than rise. Quarterly earnings grew 297.90%, so the trailing figure is inflated by items unlikely to repeat.
A buyer at 23 times forward earnings is underwriting continued search dominance through both the AI transition and whatever these EU orders eventually require. A 40% gain over twelve months says the market has already decided both go Alphabet’s way.
Market Sentiment:
Alphabet Inc. was held by 275 hedge funds with a combined stake value of about $93.7 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 265 hedge fund holders with a cumulative investment value of around $72.4 billion in the previous quarter.
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This article is originally published at Insider Monkey.
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