Google's Search Empire Faces EU Regulatory Scrutiny
Google is making changes to its European search results to comply with new EU rules. The revised setup will provide greater exposure to competing services, which could alter how users discover comparison and booking services.
The changes stem from the Digital Markets Act, a regulation that requires Google to prioritize local businesses and services over its own offerings. Under the new framework, comparison providers for hotels, flights, and restaurants may receive more prominent placement in search results.
However, Google warns that the changes could hurt user experience and reduce the usefulness of Search. The company has already seen a 30% reduction in unpaid direct booking traffic to European businesses as a result of earlier changes tied to the EU rules.
The dispute adds to Alphabet's regulatory burden in Europe, where it has accumulated €10.38 billion in fines over nearly two decades. Despite these concerns, Wall Street remains positive on Alphabet, with analysts holding a Strong Buy consensus based on 24 Buy ratings and four Holds, and an average price target of $426.04 representing 25.9% potential upside.