First of all, the reason why they differentiate product and general search is, because Google injects a carousel at the top of the page, regardless of its relevancy. Thus, the differentiation.
Secondly, the big discussion of abusing its market dominance was ultimately triggered by Yelp and other vertical search engines. Google first ripped of Yelp by scraping their content and then added it to their own Google Places search. After that, they decided to give their own service more relevancy. This would not be a problem, IF they were competition in the European market, but Google has an average market share of 90 percent in Europe (note, that it has up to 99 percent in other markets like Germany) and thus Yelp is super dependent on Google.
Overall, this is NOT a fair market and Google has such a dominance in that market that new players are not likely (or ever) to appear. A 99 percent market share is a monopoly, there are not many non-government markets that experience such a malfunction.