The European Union's executive branch hit Google with official antitrust charges on Wednesday that allege the company abuses its dominance in Internet searches, and also opened a probe into its Android mobile system.
The move massively raises the stakes in the highest profile antitrust case in Europe and could lead to billions in fines for Google if the case shows the way it does business in the 28-country bloc is illegal.
In announcing the action, EU Competition Commissioner Margrethe Vestager said she is "concerned that the company has given an unfair advantage to its own comparison shopping service."
Vestager said the separate antitrust probe into Android will investigate whether the Internet giant relies on anti-competitive deals and abuses its dominant position in Europe's mobile market.
"Dominant companies have a responsibility not to abuse their powerful market position." - EU Competition Commissioner Margrethe Vestager
The EU has for years sought a settlement with Google, but says the company has not fully addressed its concerns.
The more confrontational route could mean years of legal wrangling — as well as fines worth billions. The EU can impose fines of 10 per cent on annual revenue, or some $6 billion US, and force the Mountain View, California, company to overhaul its system for recommending websites in Europe.
Vestager said her chief goal was to make sure multinationals "do not artificially deny European consumers as wide a choice as possible or stifle innovation."
The company has a market share of over 90 per cent of Internet searches in the EU, compared with around 70 per cent in the U.S. Vestager said that one in four companies complaining about Google were U.S. rivals.
"Dominance as such is not a problem," said Vestager. "However dominant companies have a responsibility not to abuse their powerful market position."
"Systematic favourable treatment"
When it comes to comparative shopping, the EU said it found that "Google gives systematic favourable treatment" to its Google Shopping at the expense of others in its general search results.
"It may therefore artificially divert traffic from rival comparison shopping services and hinder their ability to compete on the market," the EU said in a statement.
Google has 10 weeks to respond to all the allegations.
Senior Vice-President Google Search Amit Singhal said in a reaction that "while Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark."
When it comes to comparative internet shopping, Singhal wrote in a blog that "it's clear that (a) there's a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google's shopping results have not the harmed the competition."
Thomas Vinje, legal counsel for FairSearch Europe, a group that has been urging EU regulators to rein in Google, said that Wednesday's move was "a significant step towards ending Google's anti-competitive practices, which have harmed innovation and consumer choice."