3 Big Impacts We Could See To Google Shopping In The Wake Of The EU Court Ruling

The Google search engine shopping service has evolved significantly since the ruling was first introduced almost 20 days ago. European regulators are cracking down on the service in how it favors ad space. Margrethe Vestager, completion chief of the European Union, issued Google a fine in a whopping amount of $2.7 billion because it bumped up and focused on the Google shopping service in search results. The commission determined that their business practices limit competitions, innovation and product choice to consumers.

Kent Walker who is representing Google, claims that the company has done nothing wrong and indicated that they plan to appeal the decision. The company indicated that customers want to find the products they’re looking for quickly, and claimed other companies with a dominant online presence such as eBay and Amazon have a larger impact on spending habits than the search engine algorithms. This ruling can create significant changes in the results that appear in the search engine moving forward as the EU claims the practices are in violation of established EU antitrust rules.

Modified search algorithms

Google will need to modify the current algorithm that is implemented to adhere to the court’s ruling to level the playing field. Google does have options in the case, which include modifying how shopping searches show up to completely eliminating the service from all European countries. This could have a devastating financial impact on the company. Failure to adhere to the ruling before 90 days can result in fines equaling anywhere from to $10 to 14 million each day for the company.

Elimination of Google shopping in the EU
A more drastic option is to completely eliminate the ability to use the service so they aren’t required to adhere to the new regulations. This occurred previously in Spain when Google opted not to follow newly imposed regulations and pulled Google News in 2014. Google originally wanted to allow more competitors in the results to level the playing field, but this required additional payment for placement and did not satisfy the EU’s requirements for fair competition. It’s estimated that eliminating one of the five shopping panels to satisfy requirements could create a drop in overall revenue of 1.5 percent. Figures also show that Europe accounts created less than five percent of Google’s total revenue in the past year, which surpassed $90 billion.

Modification of other services
The lawsuit creates worry about how other Google services will be handled in the future. The regulations could begin to focus on services such as Google Maps and travel. Google holds a very dominant position in the search engine market. The ultimate decision, in this case, creates a precedent for future antitrust concerns. It will be interesting to see how Google handles this situation, especially if other countries begin to leverage similar concerns.

Things are likely to get more complicated as the world turns more digital and competition shifts from one company to another. This is especially true in regards to the other big American names in technology including Apple, Facebook, and Amazon that all play a part in the online marketplace in various ways. The situation stimulates the question of whether the intent of the lawsuits is to adhere to laws established for fair competition, or as an action by the European Union to limit the influence the tech giants have overseas.