European regulators did not explicitly call Google’s policy illegal but identified a range of shortcomings that they said could undermine user privacy and confidence in the company. The regulators made numerous recommendations that would allow Google to improve compliance. “As data protection regulators, we expect that Google takes the necessary steps to improve information and clarify the combination of data, and more generally ensure compliance with data protection laws and principles,” the letter said.
Google did not immediately announce any changes.
Tuesday’s action comes as regulators in the United States and Europe prepare for the possibility of major antitrust cases against the company. Competitors such as Apple, meanwhile, are pressing claims of patent violations against several makers of devices that run Google’s Android operating system.
Taken together, the proliferating legal issues amount to a threat to the growth of one of the world’s most successful companies, which this month passed Microsoft as the second-most highly valued technology company, behind only Apple. Google stock is up 30 percent since July but has faltered in recent days.
“It’s never had this much government scrutiny coming at them at the same time,” said Danny Sullivan, editor in chief of the Web site Search Engine Land, which covers the search engine business. “They are big, and many people do worry about things that are getting bigger and seemingly unstoppable.”
Regulators worldwide have sharpened scrutiny of Google as the company has moved beyond its core search business and into electronic commerce, telecommunications, social media, online videos and more. A growing number of aggrieved competitors have complained to government officials, much as rivals to Microsoft did in the 1990s, setting up what proved to be an epic showdown between the U.S. government and the company.
That case, and a similar one in Europe, centered on allegations that Microsoft used the dominance of its operating system to benefit other products, such as its Internet Explorer browser. The antitrust allegations against Google carry an echo of that case; rivals accuse the company of using its dominance of the search market to help its moves into electronic commerce, travel and other businesses.
“They’re trying to build a moat around the castle and put alligators in the moat,” said Gary L. Reback, a Silicon Valley lawyer who represented a key Microsoft competitor in the 1990s and represents Google rivals now.
Google officials declined to comment Monday on the privacy case in Europe or the antitrust investigations. But company officials have made clear their desire to avoid costly, distracting legal fights such as the ones waged by Microsoft.
“Twenty years ago, a large technology firm was setting the world on fire,” Google Executive Chairman Eric Schmidt said in Senate testimony last year. “Its software was on nearly every computer. Its name was synonymous with innovation. But that company lost sight of what mattered. Then Washington stepped in.
“In the years since, many of us in Silicon Valley have absorbed the lessons of that era.”
Privacy concerns have followed Google and other Internet companies for years, especially as they have moved into Europe, where laws are stricter. Google’s Street View program, in which cars equipped with cameras took pictures of street-level scenes, has provoked outrage in Germany and some other countries. The controversy was made worse when investigations revealed that the cars also collected personal information from unsecured WiFi signals; the company said that was done in error and apologized.
The company says that such tracking allows it to serve more relevant ads; a visitor to golfing sites, for example, might see ads for balls, clubs or golfing-themed resorts. Privacy advocates, however, have warned about the volume and precision of data Google is compiling on people worldwide.
The case is unlikely to have an immediate effect on users beyond Europe, though regulators elsewhere could ask Google to make similar changes. U.S. lawmakers have expressed concern about the company’s policy.
Resolving antitrust issues will probably be more difficult. Google has been negotiating with the European Union’s chief antitrust official, Joaquin Almunia, for months.
He has detailed four possible areas of violations, with the most serious being allegations that Google organizes its search results in a way that highlights its own offerings and penalizes those of rivals.
Staffers at the U.S. Federal Trade Commission, meanwhile, have circulated a draft recommendation of a possible lawsuit against Google over alleged antitrust violations. The letter includes evidence such as internal company e-mails, said a person familiar with the investigation who spoke on the condition of anonymity.
The FTC has declined comment on the case.
Several people familiar with the thinking of commissioners say a majority of the commission, including Chairman Jon Leibowitz, has significant concerns about Google’s behavior. A decision is expected before the end of the year, though few observers expect action ahead of the presidential election.
The antitrust investigation already is generating political attention. Rep. Jared Polis (D-Colo.), who has a background in the technology industry, sent a letter to Leibowitz last week discouraging the FTC from suing Google, on the grounds that the marketplace remains open to competitors.
“This is a dynamic marketplace, one in which competition exists every day,” Polis said in an interview Monday. “Today’s leader can be tomorrow’s also-ran.”