A report from a top news outlet put a damper on Google parent Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) stock on the second-to-last trading day of the week. Both of the company's listed stocks took a slight dive as a result, declining by nearly 2%. That was a steeper fall than the S&P 500's 0.6% slide.
Strict federal oversight coming?
That morning, The Washington Post reported that the government's Consumer Financial Protection Bureau (CFPB) is preparing the extraordinary step of directly placing core Alphabet business unit Google under federal supervision.
Citing two unidentified "people familiar with the discussions," the newspaper added that such a move would subject Google to measures such as regular inspections and close oversight -- similar to the situation with the banking sector.
The CFPB, which was formed in the wake of the 2008-2009 financial crisis, has a broad mandate to protect consumers from predatory behavior from American companies. Since its inception, the agency has focused on the actions of companies in the financial sector, although it has come down on businesses in other industries.
Officials from both Alphabet and the CFPB declined to comment on the story.
Interesting timing
The timing of the article is curious, coming as it does soon after the election of Donald Trump -- who's no fan of what he believes to be excessive government regulation. Right-wing critics have accused tech giants of political bias; specifically, Google was alleged to have presented search results skewed in favor of Democrat candidate Kamala Harris in the run-up to the election, among other accusations.
It's conceivable that this is a deliberate leak designed to curry favor with an incoming administration that's not otherwise enamored of agencies like the CFPB. Regardless, if the report is accurate, we can expect a bruising battle between the agency and the legal team marshaled by Alphabet.
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