True, but on the other hand, Amazon uses third party sellers. These are just shop owners trying to sell stuff, just like the shop owners that use Google for discoverability.
Yes, the problem was Google Search treating Google Shopping (formerly froogle) differently to competitors.
Froogle was doing badly (from internal memos), and then when google started treating it differently it started doing well and other competitors started losing market share.
Being in a dominant market position wasn't a problem, and nor was them creating Google Shopping. It was using their dominant market position to give Google Shopping a benefit nobody else could get.
Those are arbitrary categories. You could argue (as Google does) that buying products and discovering web sites are both just subcategories of "search". Conversely, you could argue that buying books and buying clothes are completely separate businesses.
