What happened
Shares of Alphabet (GOOGL 10.22%) (GOOG 9.96%) turned higher Wednesday, gaining as much as 3.4%. As of 11:15 a.m. ET, the stock was still up 2.7%.
The catalyst that sent the tech giant higher was a notable court victory in the world's most populous country.
So what
A battle in India's New Delhi High Court was decided in Alphabet's favor this week. Two Public Interest Litigation petitions had been filed with the court asking that Google payments be forced to cease operations in India, citing alleged regulatory and privacy violations.
The court filings suggested that Alphabet's Google Pay was operating in the country without the approval of the Reserve Bank of India, as required by the country's Payments and Settlement Systems Act (PSS) Act. The suit further suggested that Google had violated "privacy norms by gaining access to and using consumers' personal data," and that the "storage and use of sensitive and personal banking information" was illegal under the country's Aadhaar Act.
Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad concluded that Google Pay was a "mere third-party app provider" and, therefore, wasn't required to obtain authorization from banking regulators.
Now what
While payments are a small part of Alphabet's business, losing permission to do business in India could have been a significant blow to Google Pay. The country, with more than 1.4 billion inhabitants, represents about 18% of the world's population.
Had the case not been decided in Alphabet's favor, the company could have requested permission from India's banking regulators to operate, but it isn't clear whether it would have succeeded.
This decision wasn't a make-or-break one for investors interested in Alphabet. Furthermore, at less than 5 times next year's sales, the stock is still well below its historic average. The time to buy is now while Alphabet is still on sale.
