Google warned by EU to make changes or face fine

The ultimatum could end Google's three-year back and forth with the EU

Google will face formal charges if it fails to come up with a suitable plan to give equal prominence to rival search engines, the EU has warned.

There have so far been three attempts to solve the long-running dispute.

Competition commissioner Joaquin Almunia told a European parliamentary committee that the next logical step would be to issue a statement of objection, including formal charges.

Google said that it continued to work with the EU.

The company is accused of abusing its dominant position in Europe, where it accounts for 90% of search traffic.

Improvement needed

The dispute has been running since 2010 when rivals, including British price-comparison site Foundem, complained about the way it displayed results.

The deal suggested by Google in February was rejected after 20 formal complaints made the EU rethink its original decision to accept the proposals.

Under the terms of the deal, Google agreed to reserve space near the top of its European search pages for competitors, which would be open to rivals to bid for via an auction.

Rivals argued that Google's solution was unfair for a range of reasons, including the fact that Google would make money out of the changes.

"At the beginning of the month I have communicated this to the company asking them to improve these proposals," said Mr Almunia.

"We now need to see if Google can address these issues and allay our concerns."

He did not put a timeframe on the new proposals but acknowledged that it could be left up to the next Commission headed by Jean-Claude Juncker to sort out.

Mr Almunia steps down in October.

But, he warned, if the next set of proposals failed to impress, the next stage would be a fine.

"The next logical step is to issue a statement of objection," he said.

Regulatory hurdles

EU rules mean that a company falling foul of anti-trust laws can be fined up to 10% of its annual sales.

Last year, Google's annual sales amounted to $55.5bn (£33.8bn).

For its part, Google seemed in no mind to appease the EU. Writing an opinion piece for the European Commission's Digital Minds - a series of articles about the digital age written by some of the biggest players in the industry - chairman Eric Schmidt said that Europe needed to embrace disruptive industries such as Uber.

"New businesses promoting new ideas should not be held back by bureaucratic or regulatory hurdles," he wrote.