I haven’t been the biggest fan of Alphabet Inc (NASDAQ:GOOGL,NASDAQ:GOOG) stock, which has left me on the sidelines as the GOOGL stock price, once again, has cleared $1,000. Obviously, there’s plenty of good news here, with the core advertising business still growing and some intriguing opportunities in the “Other Bets” segment.

But I also question how long the company can manage declining pricing in the advertising business and I’m highly skeptical that its move into hardware is an answer to its need to diversify.

Waymo is interesting, but Alphabet is the second-most valuable company in the world behind Apple Inc (NASDAQ:AAPL). An estimated $70 billion valuation for that unit looks high, but still represents roughly one-tenth of the company’s enterprise value.

There’s still a risk to the core advertising business here — and that risk may be rising on the regulatory side. The “fake news” of the 2016 US presidential election has focused attention on Google, along with social media platforms Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR). European authorities have their eye on the company as well.

Individually, most of the issues seem like nuisances at worst. In total, however, they could have an impact. And combined with some of my other concerns about Alphabet, they make the GOOGL stock price seem questionable just off all-time highs.

Regulatory Risks For Alphabet

The regulatory concerns facing Alphabet are broad and, seemingly, increasing. The alleged Russian interference in the 2016 presidential election has led to calls for more regulation in the space. Three senators have introduced the Honest Ads Act, which would require Alphabet (and other major content providers) to maintain a public list of ad buyers. Further regulation likely will be considered, including the expansion of “net neutrality” principles to cover Alphabet’s search business.

These concerns are part of a larger sentiment that Alphabet and its peers are simply too big — they control too much data, with too little oversight. That is leading to antitrust worries. As James Brumley argued on this site in September, the potential for antitrust efforts in the U.S. is very real. Indeed, the attorney general of the state of Missouri recently initiated precisely such an investigation.

And in Europe, Alphabet already has been assessed a $2.7 billion fine (which is under appeal). Another levy reportedly is on the way. Britain is considering regulating both Google and Facebook as news providers — which would impact the operating model in that country as well.

It’s not just regulators. Major advertisers boycotted YouTube earlier this year amid concerns about extremist content. Obviously, those efforts had little effect on Alphabet earnings, which blew past expectations in the second and third quarters. But balancing advertiser concerns and free speech is a delicate act, as Twitter has learned, and Google will have more potholes to navigate going forward.

Does It Really Matter for the GOOGL Stock Price?

The question is whether these seemingly small issues really matter to the GOOGL stock price. The $2.7 billion fine from the EU sounds like a big deal, but it represents roughly 0.4% of Alphabet’s market capitalization. US regulatory pressure on the search business seems unlikely, unless politicians want to push business to former antitrust target Microsoft Corporation (NASDAQ:MSFT) and its Bing search engine.

But there is a case to be made that these pressures can have an impact. RBC Capital Markets analyst Mark Mahaney pointed out in September that higher regulation could increase Google’s TAC (traffic acquisition cost), the rise of which is already is a modest concern. Much of the business model here is based on leveraging dominance in search and in Android to other areas, such as the Google Home smart speaker. Antitrust efforts similar to those targeted at Microsoft in the 1990s could undercut that strategy.

Regulation alone isn’t enough to create a short case for Alphabet stock — but it is a concern. Combined with fears of a slowdown in advertising revenue and/or margins, and a price-earnings multiple at historical highs, it does raise questions as to whether the GOOGL stock price can stick above $1,000.

After all, the bull case for the stock in large part is based on Alphabet’s dominance in key areas. But if regulators see that dominance as abusive, that bull case will suffer… and so will Alphabet stock.

As of this writing, Vince Martin has no positions in any securities mentioned.