In Germany, they have a term for silicon valley companies like Google, Amazon and Facebook, the big beasts of the internet that have come to dominate our online lives. They are known as the datenkraken. The word means data octopuses, and it is intended to frighten – in Norse myth, the Kraken was a murderous sea monster.

Today's datenkraken do not drag mariners into the deep, but they have tentacles that reach around the world, gathering the data of private citizens on a scale that, since Snowden's revelations about US surveillance, has created huge unease in Europe.

Last Monday, the European Commission's outgoing competition commissioner, Joaquín Almunia, decided to reopen his five-year investigation into Google's search rankings. Finishing the job will fall to Almunia's replacement, the former Danish finance minister Margrethe Vestager. Her colleague, Europe's new digital economy commissioner Guenther Oettinger, has already made his feelings known. On Wednesday, he said Google's market power could be limited, adding that he would work to ensure that the search engine's services preserve neutrality and objectivity.

The message from Brussels is clear, according to Ian Maude, new media expert at Enders Analysis: "Google is the new Microsoft. As far as the regulators are concerned, it is the big bad wolf."

Over the course of investigations and legal battles that ran from 1993 to 2013, the commission imposed more than €2bn in fines on Microsoft. There were probes into licensing practices, and orders to unbundle its products, so that European Windows users had a choice of web browsers and media players other than those produced by Microsoft.

The relationship between the US group and Brussels was highly confrontational. Microsoft did not send its executives to woo the commissioners, it sent armies of lawyers to fight each proposal. But now, the shoe is on the other foot.

Google has become as dominant on our personal computers – laptops, phones and tablets – as Microsoft was a decade ago. In search, its position seems unassailable. An estimated 90% of user queries pass through Google in Europe, according to StatCounter. As one of the lead plaintiffs against Google in Brussels, Microsoft is now only too willing to use the regulatory powers of the commission against its rival.

Google's strategy has been to send its chairman, Eric Schmidt, on diplomatic missions to Brussels, and work with the commission to find a solution. The controversy is over natural search – as opposed to the paid-for results that appear on the right hand side or at the top of the Google page. Rather than producing a series of blue links in response to queries, Google has begun answering questions itself. Ask for the weather today, and you will be shown a forecast for your region. Look up French food in Nottingham, and you will be shown a map with pins locating each restaurant, plus a list of establishments with addresses and star ratings.

Rivals complain this diverts traffic away from specialist websites offering the same information, like OpenTable or TripAdvisor. Google offered to change the way it presented search results. Its first two solutions were rejected by Almunia, but the third was accepted. It would involve two boxes – one containing Google's own information, and another showing information from rivals, with places auctioned to the highest bidder. Research by Microsoft shows that even with these changes, the Google links box, which is more prominent, will attract 99 times more clicks than the rival links box.

Google insists it does not promote its own products at the expense of others. Schmidt said in a letter to the Financial Times last week: "We aim to show results that answer the user's queries directly (after all we built Google for users, not websites) … To date, no regulator has objected to Google giving people direct answers to their questions for the simple reason that it is better for users."

Google's constructive, conciliatory approach initially convinced Almunia. But in February 2014, when he gave the US group's third proposal a preliminary thumbs up, the result was uproar, not just from competitors but from the French and German governments.

Egged on by European media companies and telecoms firms, whose sectors are most threatened by the digital revolution, politicians rushed to criticise the decision. In France, opposition was led by Arnaud Montebourg, who was economy minister until president François Hollande dissolved his government last month. Along with his German counterpart, Sigmar Gabriel, he wrote to Almunia demanding a rethink.

"We don't want to become a digital colony of global internet giants," Montebourg said in May. "What's at stake is our sovereignty itself."

In parts of Europe, Google is more than the next Microsoft. It is an agent of American colonialism. By gathering the private data of European citizens, Montebourg believes that Facebook and Amazon are creating databases that can be exploited for virtually tax-free commercial gain, or mined by intelligence experts in Washington DC.

In the German press, Gabriel wrote: "Every time we "search" for something on Google, Google searches us and captures information about ourselves which can not only be sold for targeted personalised advertising, but is, essentially, also available to our bank, our health insurance company, our car or life insurance company, or – if the need arises – to the secret service.

"There's no such thing as a free lunch – we pay for these services with our personal data – and, unless we are careful, at the end of the day with our personal and social freedom as well. It is the core task of liberalism and social democracy to tame and restrain data capitalism gone wild."

Sigmar's words read like a political manifesto. It is a manifesto that has been adopted by Jean-Claude Juncker, the European Commission's newly elected president. "Europe's path to growth is paved with tablets and smartphones," the former Luxembourg prime minister states on his personal website. While Europe led the world in mobile technology, it has trailed America in the creation of internet corporations and jobs. Juncker believes bringing Eruope's 500m citizens into a single market for technology – with common laws for things like copyright, co-ordinated mobile phone spectrum auctions, and regional regulators – will create strong businesses and jobs. It is his top priority, above even energy security.

Among Google's most powerful critics is Mathias Döpfner, whose Axel Springer group publishes the tabloid Bild, Germany's most widely read newspaper. When Angela Merkel humiliated David Cameron by switching sides and supporting Juncker for the top job in Europe, fingers were pointed at Döpfner. Convinced that the Luxembourgian politician would back his calls for tougher sanctions on Google, he is said to have used Bild's influence to turn Merkel.

In an open letter to Google's Schmidt, penned in April, Döpfner warned: "Voluntary self-subjugation cannot be the last word from the Old World. On the contrary, the desire of the European digital economy to succeed could finally become something for European policy, which the EU has so sorely missed in the past few decades: an emotional narrative."

It is a narrative that has cast the American datenkraken as the arch enemy. Brussels would like to dismantle their low tax corporate structures, and Almunia made a first move in June, announcing a probe into tax arrangements used by Apple in Ireland and Starbucks in the Netherlands.

Now the Google search inquiry has been re-opened. Another, delving into Google's Android mobile platform, and how phone makers are required to pre-install its Chrome internet browser and other services, is waiting in the wings.

The Berlin wall has fallen, but Europe is erecting new defences: it is building a firewall to protect the Old World from becoming a digital colony of the New World.