UK Edition
Shareholders call for Google’s parent company to be broken up
Shareholders of Google's parent company Alphabet have called for it to be broken up, citing concerns over human rights abuses and the potential for further regulatory action.
They claimed the company's reputation has been damaged by allegations that it continued to work on a censored Chinese search engine and expanded the country's cyber-surveillance of citizens.
In a motion that will be tabled at the shareholders meeting in June, Alphabet shareholders have argued that the company is "too large and complex to be managed effectively" and have called for an independent committee of directors to restructure the business.
The motion was submitted on behalf of four individual SumOfUs members with a total of 131 shares.
"Alphabet continues to be controlled by two of its founders, despite their ownership of no Class A shares, which account for 86pc of outstanding shares as of March 29, 2018," the motion read.
"We believe that shareholders could receive greater value from a voluntary strategic reduction in the size of the company than from asset sales compelled by regulators."
These concerns come after US presidential candidate Elizabeth Warren called for tech giants including Google to be broken up, claiming they “bulldozed competition and tilted the playing field in their favour” as she laid out a plan for strict antitrust rules.
The shareholder proposal has suggested unifying class A and B shares as well as the sale of Alphabet's assets.
Google's directors called for shareholders to vote against the proposal.
Advocacy organisation SumOfUs, which claims to represent the shareholders behind this motion, said that Google "must be reined in and take responsibility for the harm it is doing – from colluding with repressive regimes to allowing the spread of hateful, extremist content".
Earlier this week Alphabet reported a quarterly net income of $6.7bn (£5.2bn), down from $9.4bn a year ago. It came despite revenues rising to $36.3bn.
Part of this downturn was caused by Google's €1.5bn (£1.3bn) fine from the European Commission in March, when its AdSense advertising network was found to have broken EU competition rules.
Revenues were up by 17pc, a slower rate than investors have become used to. In the same period last year, they were up 26pc.