Special Reports

Google turbocharges its commerce business but feels the heat of a $2.7B antitrust fine

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An ideal online shopping experience theoretically combines keyword search with unbiased results. Google’s decision to provide consumers with an integrated search-shopping results page is not good for competition according to Margrethe Vestager, European Union (EU) antitrust chief, who announced a $2.7 billion fine — the largest antitrust fine in EU history — against Google June 27, 2017. Vestager stated, “Google has abused its market dominance in its search engine by promoting its own shopping comparison service, demoting its competitors.”

Google’s ongoing foray into online shopping, a segment largely dominated by Amazon, will face a massive setback should the ruling be upheld. U.S.-based travel companies (e.g., Expedia, TripAdvisor) joined forces with European peers in bringing Google’s practices to the attention of the antitrust commission. Losing the case would impede growth of Google Shopping, fortifying Amazon’s dominant position in commerce. The latter is leveraging consumer data within Amazon Marketplace to fuel opportunities in the data-driven, $215 billion digital advertising industry. However, given the EU’s General Data Protection Regulation (GDPR) mandate, which goes into effect May 2018, Amazon may need to temper its ambitions in the region.

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