EU opens formal investigation into Google

November 30, 2010, 2:05 PM UTC

Questions whether the Google has abused its dominance in online search.

The European Commission launched an investigation today to discern whether Google (GOOG) “imposes exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their websites, as well as on computer and software vendors, with the aim of shutting out competing search tools,” it said in a statement this morning.

Microsoft Corp. service Ciao, price comparison site Foundem, and French legal search engine logged a complaint earlier this year that Google penalized their search rankings for competing against it.  They also allege that Google blocked accepting rival’s ads.

French, German and U.K. data protection regulators have also tacked on charges that Google has used Streetview cars to collect snippets of data while they logged Wifi hotspots.

Unlike in the US, where Google has some competition form Bing and Yahoo (YHOO) and maintains a 60-70% market share, Google’s share of search in some EU countries approaches and surpasses 90%.

EU regulators have the authority to impose fines of up to 10 percent of revenue for monopoly abuses.  Intel (INTC) and Microsoft (MSFT) have both felt the wrath of the EU in recent years with Intel forfeiting $1.38 billion earlier this year.

On the matter, Google told us, “Since we started Google we have worked hard to do the right thing by our users and our industry–ensuring that ads are always clearly marked, making it easy for users to take their data with them when they switch services and investing heavily in open source projects. But there’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns.”

For an interesting take on the investigation, Danny Sullivan’s ‘The Incredible Stupidity Of Investigating Google For Acting Like A Search Engine’ is a great read.