
BRUSSELS — The European Commission warned Google on Monday that it must move quickly to change four business practices or face formal charges for violating European antitrust law.
The ultimatum was made in a surprise news conference by Joaquín Almunia, Europe’s antitrust chief.
The commission, after a two-year inquiry, found that Google might have abused its dominance in Internet search and advertising, giving its own products an advantage over those of others while maintaining that it offers a neutral, best-for-the-customer result. Mr. Almunia said Google would need to propose a plan for changing those practices within weeks.
Google dominates Internet search in Europe, controlling 90 of the market in some of the Union’s biggest countries.
“I hope that Google seizes this opportunity to swiftly resolve our concerns, for the benefit of competition and innovation in the sector,” Mr. Almunia said.
Antitrust fines in Europe can reach up to 10 percent of a company’s annual global revenue. Google’s revenue was nearly $38 billion last year. Mr. Almunia’s office also can demand far-reaching changes to the way companies run their businesses.
Google, which is also under investigation in the United States, where its search service has a less than 70 percent market share, acknowledges that its prominence invites scrutiny, but points out that competing search services are a mouse-click away.
“We’ve only just started to look through the commission’s arguments,” said Al Verney, a spokesman for Google in Brussels. “We disagree with the conclusions but we’re happy to discuss any concerns they might have.”
Antitrust experts expressed surprise at the opportunity the E.U. is giving Google to change its practices before it charges the company with antitrust violations. The rare offer reflects the delicate balance regulators are attempting to strike as they seek to fix problems in the fast-changing technology marketplace before any proposed remedies lose their relevance.
“My concern is that this form of highly unusual public encouragement in the full glare of the media puts even more pressure on companies like Google to settle early rather than contest charges that they really do think are groundless,” said Paul Lugard, the former head of antitrust at Philips, the giant Dutch electronics company, and now an assistant professor at the Tilburg School of Economics and Management in the Netherlands.
Before sending a letter formally outlining the offer, Mr. Almunia told Eric E. Schmidt, the executive chairman of Google, by telephone last week that the company should respond “in a matter of weeks” to avoid the charges, which are known as a statement of objections.
Neither Google nor Mr. Almunia described what kinds of offers could lead to a settlement in the search case. Instead, each appeared to hold out the prospect that they were prepared to walk away from negotiations.
Both sides are likely to want to avoid the decade-long case the commission undertook against Microsoft, which ended up paying €1.7 billion, or $2.2 billion at the current exchange rate, in penalties and fines.
“These fast-moving markets would particularly benefit from a quick resolution of the competition issues identified,” Mr. Almunia said, adding that this would be preferable to “lengthy proceedings.”
Mr. Almunia declined to comment in any detail on potential concerns about Google’s Android operating system, which the company has used to move into the leading position among mobile telephone operating systems.
“It’s an ongoing investigation,” Mr. Almunia said, referring to Android.
Ominously for Google, those comments suggest that the search engine could face yet more pressure from the European authorities to change its practices in another facet of its business.
People close to the U.S. investigation have said regulators there may be focusing on whether Google has strong-armed phone manufacturers using the Android operating system to offer only Google search on their phones.
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