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Alphabet (Google) share price down on EU’s break-up threat

Alphabet is one of the largest companies in the world, it owns some of the world’s most recognised technology brands. Google Maps, Google Play, Google Search, Android and YouTube all have a huge number of users.

Alphabet also has a few huge bets that’s it is making to expand into other areas like Google Fibre, automated car business Waymo, Google Jobs and Google Glass.

However, the European Union’s competition commissioner, Margrethe Vestager, has ‘grave suspicions’ about Google’s market-leading position according to the Daily Telegraph in the UK.

Mrs Vestager was asked about whether the sole solution to solve Google’s dominance was to split up the company. She said “I think it’s important to keep that question open and on the agenda. We are not there yet but it is important to keep an awakened eye.”

The EU is not shy about dishing out fines to the US’ large businesses. Last year Mrs Vestager fined Google €2.4 billion for allegedly putting its own comparison shopping service at an advantage.

Google’s strength is being able to offer users a service that almost knows more about themselves than they do. If Alphabet had to split up its businesses it wouldn’t have so much power.

Mrs Vestager said “I think the motives for illegal behaviour are the same for any kind of company. Money, fear, power – these motives have been the same across centuries. There is willingness in Europe to say this is amazing, but we are also ready to regulate, if necessary.”

Foolish takeaway

The Alphabet share price has fallen by just over 8% due to the President Donald Trump trade war fears and this EU threat could send the price down further, although I don’t think it will ultimately lead to anything. It could be an opportunity for an internationally-focused investor to pick up shares at a discounted price.

If you’re not a fan of tech shares and just want solid growth shares, then these top stocks could be what you’re after.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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