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EU launches Google antitrust probe

(BRUSSELS) - Europe launched a full-frontal attack on Internet king Google Tuesday, formally opening an antitrust probe after rivals accused the Silicon Valley giant of rigging the online search market.

European Union competition watchdogs announced their investigation, after smaller companies accused Google of "unfavourable treatment" of their services in both unpaid and sponsored search results, the crucial listings that make the web navigable.

Competition authorities are also probing whether Google's own services -- including YouTube video, book-scanning or telephony -- are getting "preferential placement" when users punch in search queries, some of which may lead to consumer spending.

Brussels "will conduct an in-depth investigation of the case as a matter of priority," the European Commission said in a statement.

Already nine months in gestation, the probe carries echoes of a decade of antitrust action against US computer giants Intel and Microsoft, each of which were eventually hit with billion-euro fines.

An investigation does not necessarily trigger legal action but the latest blow for Google comes on top of an earlier rap from France over restrictive advertising practices and ongoing national probes in Germany and Italy -- not to mention its Street View application raising vociferous privacy concerns.

Joaquin Almunia, the European Commissioner for Competition, said in an EU parliamentary hearing that Google held more than 90 percent of Europe's search market.

"How far are we ready to go? To the end," he said, adding that the case would be "very difficult.

"It is very simple to click on Google. It is not simple to understand why, when you click, you receive certain information and not others," he said.

One of the complainants, British search site Foundem, said in a statement outlining its February complaint that Google's methods "stifle innovation, suppress competition, and erode consumer choice."

The commission wants to check if Google was "lowering the ranking of unpaid search results" and examine other allegations of advertising interference including the imposition of exclusivity clauses, restricting ads from competing providers and data on consumer impact.

"When a user searches for queries like 'flights from San Francisco to London,' we think the most useful answer is showing fares and flights, not just a collection of links," a Google spokesperson said.

The company said it would cooperate with the probe. "There's always going to be room for improvement and so we'll be working with the commission to address any concerns."

Insisting "ads are always clearly marked," the spokesperson set the tone for the battle ahead by recalling that "sites have complained and even sued us over the year, but in all cases there were compelling reasons why their sites were ranked poorly by our (system)."

Google's share of the EU's online advertising was last pegged at around 30 percent in 2008.

Its part of the core US search market grew to 66.1 percent in September, according to industry tracker comScore.

The company posted a 32 percent leap in net profit to 2.17 billion dollars between July and September, its latest available results.

Google in crosshairs of the wary and watchful


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