DOJ Considering Google Breakup, Tech Rally, Bracing for Hurricane Milton 10/9/24

Carl Quintanilla (0:00)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC Squawk on the Street. Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Future steady on the back of Tuesday's 1% gain, a heady mix of corporate news today. Google, Boeing, Pfizer, Nvidia, and some macro with Fed Minutes and more than half a dozen Fed speakers today. Our road map begins with the storm watcher, though. The monster Cat 5 Hurricane Milton bearing down on the Florida coast, Tampa Bay bracing for a possible direct hit. It's first in more than a century.

David Faber (0:37)

Plus the DOJ's Google breakup threat, the government's lawyers say it's on the table as part of an antitrust remedy. And speaking of big tech, the sector coming off its best day in nearly a month, a rally which leaves the S&P within striking distance of record highs.

Carl Quintanilla (0:55)

Let's begin with the Justice Department mulling this breakup of Google on antitrust grounds. In a court filing last night, DOJ said, it was considering behavioral and structural remedies that would prevent the tech giant from using products such as Chrome, Play and Android to advantage Google search. Google responded in a blog post calling the DOJ's proposals radical and sweeping, adding they would risk hurting consumers, businesses and developers. A federal judge is expected to make his ruling next summer, Jim, and we are expecting a fuller proposal next month out of DOJ.

Jim Cramer (1:28)

This is devastating. I had hoped that you could make a, not facetious, but an actual case that maybe you'd get some of the parts being more. That is not at all what they want. What they want is to say, look, this company's monopolist. It must be punished. It's got to become the equivalent of a Greyhound bus. It can't really have any edge. It even goes to the point of even saying, listen, they're steering everything, including AI.

Now, I mean, one thing that is the big weakness of of alphabet is AI because they're not, you know, Gemini is not regarded as a top flight issue.

David Faber (1:59)

They're certainly in a really competitive race when it comes to AI. They're not.

Jim Cramer (2:03)

The government dismisses that. The government dismisses anything. I mean, if you read this, it's almost like Jonathan Kanner, who worked at Paul Weiss, by the way, Paul Weiss' representative.

David Faber (2:12)

Jonathan Kanner, who runs the DOJ's antitrust.

Jim Cramer (2:14)

He works at Paul Weiss. He understands the gamer.

I think he said, it's like he read, David will like this, Chernow, on Stendro Rockefeller and said, you know what we're not going to do? We're not going to create eight mini oil companies that everybody does better. What we're going to do is we're going to take this company and basically say, you know what? You screwed up, you monopolize, and now you have to pay. We're going to have a committee in there that's really going to run the company and decide how well you're doing. David, this is state-sponsored, I think, destruction of capital.

David Faber (2:50)

Interesting. I mean, Google obviously puts out a three-page response or so, talking of course about a radical and sweeping proposal that would hurt consumers, businesses, and developers. Here's some part of that concern. The DOJ is already signaling requests that go far beyond specific legal issues. They say, hey, the case is about search distribution, but rather than focus on that, they seem to be pursuing a sweeping agenda, impacting numerous industries and products, and a lot of unintended consequences. To your point, Jim, one of them being hampering Google's AI tools. They say risks holding back American innovation at a critical moment. They talk about AI, of course, and being a new industry and hard to think of a technology more important for America's technological and economic leadership.

Jim Cramer (3:42)

Well, they don't have to worry about that. These companies would be far from a leader. How about this? These remedies could, among other things, require Google to finance and report to a court-appointed technical committee that helps administer the remedies to the section. What is it like, the Teamsters Union? Will you have like a central master come in, decide who's going to get paid and who's not? I mean, this was, I don't know. I mean, Carl, what they're saying is, okay, there's this company, there's a bad actor, and when you're a bad actor in this country, here's what we do. We make it so you can't be powerful, and here's ways we hobble you.