Almunia says EU authorities should look at Google's tax practices

Google's data collection and use of intellectual property could also raise alarm

Googles tax optimization strategies should be examined by European Union authorities, the E.U. competition chief said on Friday.

In reacting to criticism about how he has handled the current competition case against the search giant, Joaquin Almunia said, "Other aspects of Google may give rise to concern including tax optimization, the collection and use of personal data and the use of the intellectual property of others."

He said that all these topics will probably be on the agenda of public authorities.

The European Commission has been investigating Google since 2010 after rivals accused the company of directing users to its own services and shutting out competition. Rather than proceed directly to sanctions, Almunia decided to reach a so-called Article 9 agreement with Google.

Under such an agreement, a company can avoid a fine of up to 10 percent of its global turnover, if it makes legally binding promises that the Commission considers sufficient to address the competition concerns.

In recent weeks Almunia said that he was happy with a revised set of proposals from Google, much to the anger of the complainants in the case who say the new promises are not substantially different from previous suggestions.

According to reports, other Commissioners are concerned that the proposals from Google are not good enough and members of the European Parliament have also written to Almunia to query why he was on the verge of accepting Googles latest offer.

On Friday Almunia rejected suggestions that he had reached a "gentlemen's agreement" with Google: "Not at all. I believe that, contrary to some opinions, the process is quite transparent and takes into account the interests of all."

The Commission as a whole will have to approve any deal with Google and complainants will also have a final chance to send their reaction to Almunia.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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Jennifer Baker

IDG News Service

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