Google facing multi-billion pound fine as EU watchdog launches probe into online search 'abuses'

  • Inquiry follows complaints from online search providers
  • Google insists it hasn't broken any competition rules

Google faces a fine of more than £1billion after the European Commission launched an investigation into claims it is abusing its power.

It is said to have manipulated its web search technology to make it difficult for ordinary consumers to find links to rivals' sites and services.

Google has enormous power given the fact that more than 90per cent of all internet searches carried out in Britain and Europe use its service.

Probe: Google has been accused of abusing its market dominance for profit. The EU is now investigating

Probe: Google has been accused of abusing its market dominance for profit. The EU is now investigating

Several competitors say that links to their services appear too low on Google's general search results.

HOW GOOGLE GREW TO DOMINATE THE INTERNET

Google was founded in 1996 by two students, Larry Page and Sergey Brin, at Stanford University, California.

The name comes from a misspelling of the word 'googol' which refers to the number 1 followed by 100 zeros.

By September 1997, the pair had registered the online name Google, and in 1998 they began to run it out of the garage of a friend, Susan Wojcicki.

The irreverent logo changes began in 1999 when the Page and Brin wanted to add a Burning Man graphic to the commemorate their visit to the Nevada festival.

By the end of 1998, Google had an index of about 60million pages and quickly became the principal Internet search engine.

Its dominance has steadily grown over the last decade.

So much so that in September it was announced that Google's share of the core U.S. search market had grown to 66.1 per cent, according to industry tracker comScore.

They also claim that when Google offers similar services, such as online price comparison, it puts its own links higher on the the list of results.

The Commission is taking action after complaints from the UK-based price comparison site Foundem, the shopping site Ciao, which is owned by Microsoft, and the French legal search engine ejustice.fr.

The investigation is the first of its kind into Google. If found guilty it could, in theory, be fined up to 10 per cent of its European turnover, which could be as much as £1.6billion.

In previous cases, the Commission fined the computer chip maker Intel some £900million and Microsoft £1.2billion for similar abuses of power.

The Commission stressed the decision to launch an investigation does not imply any wrongdoing by Google. However, it shows officials do take the complaints seriously.

It has notified the US Department of Justice of its investigation, which is likely to take 'at least a few months'.

Speaking to the European Parliament, the Competition Commissioner, Joaquin Almunia, said it was 'far too early to say' whether there was definitely a problem with Google's conduct.

But, he said: 'We will investigate in-depth potential concerns as regards Google's conduct, notably on the way in which search results are set out.

'Rigorous competition of all players, including smaller and innovative ones, must be preserved for the future.'

Google maintains it has done nothing wrong. It said: 'Since we started Google we have worked hard to do the right thing by our users and our industry.

'But there's always going to be room for improvement, and so we'll be working with the Commission to address any concerns.'

Competition watchdog: If the EU Commission finds that Google has abused its market position, the company could be fined up to 10 per cent of its revenue

Competition watchdog: If the EU Commission finds that Google has abused its market position, the company could be fined up to 10 per cent of its revenue

Google also said there were 'compelling reasons' why the complaining companies 'were ranked poorly' in its searches.

It said Foundem 'duplicates 79 per cent of its website content from other sites, and we have consistently informed webmasters that our algorithms disadvantage duplicate sites'.

ICOMP, a business group which is sponsored by Microsoft and includes Foundem among its members, said it welcomed the Commission's investigation.

The group's legal council, David Wood, said: 'A thorough investigation is necessary to determine the workings of Google's black box.'

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