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Brazil investigates Google over antitrust charges

A Google logo is seen at the entrance to the company's offices in Toronto September 5, 2013. REUTERS/Chris Helgren
A Google logo is seen at the entrance to the company's offices in Toronto September 5, 2013. REUTERS/Chris Helgren

By Brad Haynes

SAO PAULO (Reuters) - Brazil is investigating Google Inc for anticompetitive practices alleged by Microsoft Corp and Brazilian rivals, adding to government pressure in one of Google's fastest-growing major markets.

Brazilian antitrust watchdog Cade said on Friday it is looking into accusations that Google has unfairly used rivals' content, discouraged their advertisers and favored its own product listings in search results.

A Google spokeswoman in Sao Paulo said in an email that the company would cooperate with Brazilian regulators.

Microsoft filed a complaint charging Google with obstructing advertising campaigns across multiple search engines to give an unfair advantage to its highly profitable AdWords service, according to a Cade statement. AdWords is Google's main source of advertising dollars, which make up 95 percent of revenue.

Brazilian comparison shopping sites Buscapé and Bondfardo also accused Google of reproducing product reviews from their users, a practice known as "scraping," without allowing the competitors to do the same with its website Google Shopping.

Cade is also looking into complaints from Buscapé and Bondfardo that Google gives unfair prominence to Google Shopping on its general Web search, making it the only price-comparison tool that appears with photos, prices and evaluations.

The regulatory pressure comes as Brazilian authorities take a closer look at major U.S. Internet companies such as Google and Facebook Inc after revelations the United States spied on digital communications by President Dilma Rousseff and state-run oil company Petrobras.

Rousseff has pushed new legislation that would force major Internet companies to store locally gathered data inside Brazil, requiring the construction of costly new data centers.

Communications Minister Paulo Bernardo recently suggested tech companies were not paying enough taxes.

Google is moving closer to settling a three-year antitrust dispute with the European Union on grounds similar to those raised by the Brazilian investigation.

Last year, Google won an initial ruling from a Sao Paulo court in a lawsuit filed by Buscapé and Bondfardo covering the same practices they outlined in their Cade complaint.

The court found that Google did not have a monopoly over Brazil's search engine market and was not a direct competitor with comparison shopping websites. Buscapé appealed the ruling.

Google is facing increased scrutiny at a time when Brazilian regulators are working to ramp up the enforcement of competition laws following years of complaints from consumer advocates of lax oversight and antitrust abuses by companies.

(Additional reporting by Leonardo Goy in Brasilia.; Editing by Matthew Lewis and Andre Grenon)

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