Brazil investigates Google over antitrust charges


* Microsoft, Brazilian rivals complain of unfair practices

* Brazil probing U.S. Internet companies after spying news

By Brad Haynes

SAO PAULO, Oct 11 (Reuters) - Brazil is investigating GoogleInc for anticompetitive practices alleged by MicrosoftCorp and Brazilian rivals, adding to governmentpressure in one of Google's fastest-growing major markets.

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

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

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

Brazilian comparison shopping sites Buscapé and Bondfardoalso accused Google of reproducing product reviews from theirusers, a practice known as "scraping," without allowing thecompetitors to do the same with its website Google Shopping.

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

The regulatory pressure comes as Brazilian authorities takea closer look at major U.S. Internet companies such as Googleand Facebook Inc after revelations the United Statesspied on digital communications by President Dilma Rousseff andstate-run oil company Petrobras.

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

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

Google is moving closer to settling a three-year antitrustdispute with the European Union on grounds similar to thoseraised by the Brazilian investigation.

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

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

Google is facing increased scrutiny at a time when Brazilianregulators are working to ramp up the enforcement of competitionlaws following years of complaints from consumer advocates oflax oversight and antitrust abuses by companies.

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