The European Union will investigate Google over claims that the company has abused its online search power to keep rivals’ products low down in Google’s vertical search results.

The anti-trust watchdog received a number of complaints about Google from smaller internet search providers. They claim that Google manipulates its search results so that its own products remain on top while competitors’ are ranked lower.

Internet users would expect some Google products – like Youtube or Google maps – to appear at the top of results. However others, like Google’s price comparison site or health services, are less popular yet still appear at the top of search results, at the expense of rivals.

Google is also being accused of lowering the quality score for sponsored links of competing search services. The quality score influences the likelihood of an ad being displayed by Google as well as its ranking.

For example, Microsoft claims that when Google has a similar service, like its price comparison site, the search giant puts its own links higher than Microsoft’s on the sponsored search results.

The EU commission will also investigate whether Google prevented advertising partners from running ads from Google’s competitors on their sites.

Google has strongly refuted all of the allegations, saying it has never intentionally hurt competing services, and that it aims “to provide the best results for users”.

Google says there are good reasons why competitor services are ranked lowly by its algorithms.

Although Google is not ye being accused of any untoward business practices, Europe’s antitrust regulator will launch a thorough investigation.

If Google is found to have abused its dominant position it will incur a fine of up to 10% of revenue. For Google that would amount to $2.4 billion based on 2009 earnings figures.

Google said: “There’s always going to be room for improvement, and so we’ll be working with the Commission to address any concerns.”

Meanwhile, Google’s logo has been kitted out in tartan today to mark St. Andrew’s Day.