The NewCo Daily: Today’s Top Stories
You know how, when you search Google for some kind of product, the top of the results page displays a row of ad boxes for the product? That’s called Google Shopping, and it just cost the company $2.7 billion in fines from the European Union. Regulators there charge that Google has favored its own shopping search tool at the expense of competitors’ offerings (The New York Times).
That penalty amount is way higher than experts expected, and it holds dark omens for Google. It’s not that the large penalty is itself a serious problem for the wealthy company; it earned twice that amount in the first quarter of this year alone.
What Google has to worry about now is years of continued oversight from the EU (Reuters) in an environment where European regulators have now made clear that they view the company as a malefactor (Vox). In the worst case for Google, the move winds up encouraging the Bannonite faction of the Trump administration to pursue its own populist war on the tech giant (Axios).
The company could easily roll back the Shopping feature in the EU to an earlier version if it needs to (Recode), and if it could make the whole problem disappear by doing so it probably would. It has never been shy of shutting down products and services that fail to scale up or throw off big profits — look at its recent decision to stop showing advertising related to the content of your email. (People found it creepy and the ads weren’t terribly valuable.)
But the EU challenge looks far broader and more determined to force Google to behave less like a private enterprise and more like a public resource. That could distract and weaken the company at a critical moment in the corporate race to deploy universal consumer-grade AI. Google Assistant is up against competitors from Apple, Microsoft, and Amazon. The last thing it needs is a legal war of attrition.
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