A group of Alphabet shareholders teamed up with global consumer group SumOfUs to ask for Alphabet to be broken apart, citing major concerns regarding the growing ineffectiveness of any form of oversight over one of the largest conglomerates in human history. They did so via a shareholder resolution submitted to the agenda of the technology juggernaut's next annual stockholder meeting scheduled to take place on June 19.
According to a copy of regulatory filings presented to the United States Securities and Exchange Commission, the proposal that shareholders will entertain next month comes down to an argument that as Alphabet gets bigger and its individual units themselves follow Google's example and begin dominating numerous industries, hence tying the fate of countless other firms and jobs to their own prospects, effectively overseeing their operations in order to combat possible conflicts of interest, corruption, and other worrisome trends will become nigh impossible, assuming that's not already the case.
As a result, the said investor minority fears Alphabet will eventually start embracing oppressive regimes and dictators around the world more openly, adding that no one will be able to stop it at that point.
The shareholders working with SumOfUs are arguing this is simply an issue of effective management; if employees can't be managed in a reliable manner, change is not just desirable but necessary, regardless of how high up the corporate food chain those officials actually are, according to the initiative. In conclusion, a continued lack of effort on the part of investors, i.e. a shareholder majority resigned to sticking to the sidelines and watching Alphabet grow to new unprecedented heights is likely to make the planet as a whole a worse place for human rights and numerous other crucial issues, the proposal indicates.
The activist stockholders did not package their proposal as a preventive measure; in fact, they're suggesting it may already be too late to reign in Alphabet but believe they're still obliged to try. Seemingly endless antitrust issues in Europe and beyond, various controversies in China, data security blunders, user privacy violations, leaks, disturbingly aggressive tracking tech implemented into Android – those are just some of the issues the proposal cites as evidence that Alphabet is now too big of an organization to be shieldable from corruption; with so many figurative cogs moving all at once, there's little to no chance of ensuring transparency and ethical behavior without significantly stifling the firm's M.O. (which some would argue isn't a negative in the first place).
The solution is to go back to the basics; break up Alphabet into a larger number of smaller entities, all with their own oversight mechanisms, the proposal reads.
The June 19 meeting is taking place in Sunnyvale, California. Given how the activist proposal detailed above has been officially entered into its agenda, stockholders are bound to entertain it for a moment but anything other than an overwhelming vote against the motion would be a massive surprise. At the end of the day, investors put money into Alphabet to make money – everything else is just a nuisance.