Google was served the biggest antitrust fine in history by the European Commission Tuesday.
The $2.7 billion fine was aimed at Google's shopping practices, which the EC deemed unfair to Google's competition.
Macquarie Research thinks that while the practice probably is unfair, the fine severely limits Google's ability to refine and improve its core product, which could mean big headwinds for Google in Europe.
Macquarie argues in a recent note to clients that the recent decision to fine Google is a basic assault on its ability to do business in the EU.
It is then, in effect, stating that if Google improves its services within is general offering (e.g., adding shopping services, or potentially a host of other features), then these improvements are harming competitors unfairly.
We see this as misguided given that, in our view, Google should (and must) continually improve its offerings if it is to provide consumers and advertisers more useful features.