The European Commission today accused Google of abusing its dominant position in the search engine market to benefit its own advertising services at the expense of competitors. But rather than launch "formal proceedings," Europe is giving Google a chance to settle the matter.

EC Vice President Joaquin Almunia outlined European concerns today in a statement and letter to Google Executive Chairman Eric Schmidt. Almunia outlined four areas where the EC believes Google is violating competition laws:

"In its general search results, Google displays links to its own vertical search services differently than it does for links to competitors," Almunia said. "We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence."

"Our second concern relates to the way Google copies content from competing vertical search services and uses it in its own offerings. Google may be copying original material from the websites of its competitors such as user reviews and using that material on its own sites without their prior authorization. In this way they are appropriating the benefits of the investments of competitors. We are worried that this could reduce competitors' incentives to invest in the creation of original content for the benefit of internet users. This practice may impact for instance travel sites or sites providing restaurant guides."

"Our third concern relates to agreements between Google and partners on the websites of which Google delivers search advertisements. Search advertisements are advertisements that are displayed alongside search results when a user types a query in a website's search box. The agreements result in de facto exclusivity requiring them to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services. This potentially impacts advertising services purchased for example by online stores, online magazines or broadcasters."

"Our fourth concern relates to restrictions that Google puts to the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. AdWords is Google's auction-based advertising platform on which advertisers can bid for the placement of search ads on search result pages provided by Google. We are concerned that Google imposes contractual restrictions on software developers which prevent them from offering tools that allow the seamless transfer of search advertising campaigns across AdWords and other platforms for search advertising."

The investigation comes after complaints "from smaller Web businesses and from Microsoft that Google downgraded their sites in its search results to weaken potential competitors for advertising," the New York Times notes. The EC told Google it has "a matter of weeks" to propose remedies to the four concerns, or face formal proceedings that could end in a fine or remedies imposed by European regulators.

When reached for comment, Google told Ars that it disagrees with the allegations and that competition is already increasing in the search engine market.

"We've only just started to look through the Commission’s arguments," Google said in a statement. "We disagree with the conclusions but we're happy to discuss any concerns they might have. Competition on the web has increased dramatically in the last two years since the Commission started looking at this and the competitive pressures Google faces are tremendous. Innovation online has never been greater."

Globally, Google controls 78.64 percent of the desktop search market, down from 83.19 percent a year ago, according to NetMarketshare. Google still has more than 91 percent share in mobile search.