Google To Appeal EU's Antitrust Decision Amid Growing Competition

The European Commission’s multibillion dollar antitrust decision, announced today, could have a long-term effect on Google’s dominance in search, as Amazon continues to move in and take share of product searches, according to one Wall Street analyst.

As expected the European Commission fined Google $5 billion as part of an eight-year probe into its business practices to give its Android operating system a dominate market position on phones and in search. 

Google plans to appeal the decision.

“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less,” Google CEO Sundar Pichai wrote in a blog post.

“Rapid innovation, wide choice and falling prices are classic hallmarks of robust competition,” Pichai added in a Twitter tweet.

Baird equity analyst Colin Sebastian published a note explaining how the ruling should have a limited impact on Google, since it does not force a change to the Google search algorithm and seems straight-forward for Google to comply.

“The bigger issue here may be the obvious benefits to Amazon (and potentially Apple) from the ruling; first, even though Amazon already generates ~50% of commerce and product-related searches, the EC will require Android users to take another step before they can access an alternative product search engine,” he wrote.

“Secondly, to force Google to support distribution of forked-versions of Android (which Google does not control) could directly benefit Amazon’s Fire devices,” Sebastian added.

Sebastian cited an example used by Margrethe Vestager, the European Commission for Competition, in the press conference.

He wrote: “The EC argues that Fire smartphones were not commercially successful because Google did not allow manufacturers to pre-install Google apps on those devices. (Forget the fact that the apps wouldn't work as well, or at all, on a modified OS.)” 

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