Will Google Listen to This Warning?

Google (NASDAQ:GOOG) must do more to answer claims from rivals that it is abusing its dominant position in the search market in Europe, EC Competition Commissioner Joaquin Almunia warned on Friday.

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Since 2010, the Competition Commission has been looking into whether Google’s search engine favors the firm’s own assets, ranking them higher on the search results page, while hindering those of competitors like Microsoft (NASDAQ:MSFT), one of the plaintiffs. The Commission is also investigating whether Google’s advertising service breaks the rules by blocking the ads of rival firms, and whether Google has been copying rivals’ travel and restaurant reviews.

One possible outcome, an Article 9 settlement, might require Google to alter the way it does business, at least in the EU, but without formally having to admit wrongdoing or pay a fine. Almunia’s public warning comes as observers hint there has been little progress in talks and that Google has offered few concessions, especially over the ranking of search results.

“We are not there yet, and it must be clear that, in the absence of satisfactory proposals in the short term, I will be obliged to continue our formal proceedings,” Almunia said Thursday in New York.

If the case does go to court, and Google is found guilty, it could be facing a fine of up to 10 percent of its worldwide revenues. Additionally, its whole search-based business model would be affected by legal restrictions on the way it could use its search results.

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