Google offers to settle with investigators looking into claims it unfairly stifles opponents

The internet search giant Google faces having to make changes to the way it runs some of the most lucrative parts of its multi-billion pound business after it made an offer to settle with European Commission investigators looking into claims it uses its muscle to stifle opponents unfairly.

The firm is seeking to avoid a formal probe into allegations its search engine favours its own products over those of its competitors. But its offer of a settlement could open the door for investigators looking into similar complaints in some of the world's biggest markets - including the United States, India and South Korea - to demand the same concessions.

Google confirmed it made an offer, sent to the European Commission (EC) by its executive chairman Eric Schmidt. If the EC accepts the deal, the antitrust probe will be dropped.

While Google will have to satisfy the EC that it will not hold an unfair advantage over competitors in order to have the case dropped, doing so would see the firm would avoid a fine of up to 10 per cent of its global earnings, which totalled £24.1b illion last year. It will also fend off any moves to impose more stringent restrictions on its European operation.

The firm has agreed to make concessions on how it runs it search, advertising operations. European competition commissioner, Joaquin Almunia wanted to look at claims that Google promotes its own products, such as YouTube and Google Maps ahead of similar services offered by its competitors in search results.

He also wanted to investigate allegations the firm copies competitors? material such as restaurant guides in its search results, as well as two separate concerns over how it runs its advertising business. Google, which reportedly has around 95 per cent of European online search traffic, was told to respond in May or face a formal investigation.

A Google spokesman refused to reveal the details of the firm's offer but confirmed the deal included settlements on all "four areas the European Commission described as potential concerns". The spokesman said: "We continue to work cooperatively with the Commission."