EU launches anti-trust inquiry into Google

European regulators have launched an anti-trust investigation into Google over whether it "has abused a dominant position in search", in what some experts have called a "crucial moment" for the internet giant.

A similar investigation was launched in the US by the attorney-general of Texas a few months ago.

The European Commission said yesterday that it had opened a formal inquiry into Google following allegations of unfavourable treatment from rival search engine companies.

Foundem, a husband-and-wife-run website in the UK, France's ejustice.fr, and Ciao, which is owned by Microsoft, complained that Google had demoted them in its search results.

A spokesman for Google said: "Since we started Google, we have worked hard to do the right thing by our users and our industry.

"There is always going to be room for improvement, and so we'll be working with the commission to address any concerns."

David Wood, a partner at Gibson Dunn and legal adviser to Icomp, an internet commerce body which is sponsored by Microsoft, said: "This is an extremely significant moment for Google; it is the moment the company has to grow up."

The European Commission will investigate whether Google demoted search results as well as lowering the "quality score" of others. The quality score influences how much advertisers pay to be displayed alongside a search result.

Google said: "We built Google for users, not websites, and the nature of ranking is that some websites will be unhappy with where they rank. Those sites have complained and even sued us over the years, but in all cases there were compelling reasons why their sites were ranked poorly by our algorithms."

While there is no legal deadline for the inquiry, Mr Wood predicted that the EC should reach a decision within six months, but added that it was too early to talk about potential remedies or even fines.

Google's websites were visited by 325 million unique visitors across Europe in October, according to the research group comScore, when a total of 33.9 billion searches were made. Google had 84 per cent of all search traffic, with its nearest rival being the Russian site Yandex with 7 per cent. Microsoft's Bing had 1.9 per cent.

Google said that while there was "no doubt" that it has a large share of search queries as measured by companies including comScore, "in reality there is a lot of competition when it comes to accessing information online".

It pointed out that it competes with Amazon and eBay for retail search enquiries, and social networking groups such as Facebook and Twitter were becoming an increasingly important source of sharing links. "Google's high share of traditional search queries doesn't give it a position of dominance; and our competition is only one click away," it said.

Whit Andrews, an analyst at Gartner, said: "Google is still extremely vulnerable. It is not like Facebook, where, if users leave, they have to bring all their friends with them. With Google you can just go somewhere else. This is a crucial moment for the company."