The former deputy chairman of the Competition Commission has called for UK regulators to probe Google’s “huge commercial power” to arrest a “dangerously imbalance” in the online advertising market.

The move comes amid growing pressure from rivals, including WPP, the advertising group, and Microsoft, the software giant, for regulators to curb Google's expansion.

Baroness Kingsmill, widely seen as a cheerleader for intervention during her six years on the Competition Commission, said in today’s Financial Times that the “concentration of power” created by Google’s dominance of the internet search market “creates risks for businesses and consumers that ought to be the subject of a market inquiry in the UK”.

In response, a Google spokesman said: "Search is one of the most competitive industries around, and users are only ever one click away from an alternative search engine."

He added: "On the advertising side, thousands of companies compete in selling ad space online. In addition, the broader advertising market is highly competitive and dynamic, and online advertising faces stiff competition from TV, radio, outdoor, newspaper, and magazine advertising as well as direct marketing."

Lady Kingsmill stepped down from the Commission in 2003, a year before Google floated on the stock market.

A UK investigation would run in parallel to the Federal Trade Commission investigation into Google taking place in Washington, which was sparked by the company’s acquisition in April of DoubleClick, the biggest broker of display – or banner – advertising on the web.

Calling for the US enquiry, Microsoft said that the $3.1 deal “raises serious competition and privacy concerns”.

However, competition lawyers suggested that the global nature of Google’s business may mean that the UK regulators are ill-placed to act.

Pat Treacy, the head of the competition practice at Bristows, the law firm, said: “The Office of Fair Trading and Competition Commission are not in the best place to look at Google’s position in what is a truly global market … it would be unlikely to be a good use of resources.”

She added that in the case of concerns over Google’s recent acquisitions, a “well developed merger control regime already exists, which may be a more focused and better way to act”.

Ms Treacy also noted that Google yesterday bowed to concerns from the Article 29 group of European data watchdogs and reduced the amount of time it stores personal data that can be used to identify users to 18 months from 24 months. The move suggested that dialogue may reduce the need for regulatory curbs in other areas, she said.

Other lawyers suggested that a European Commission sector enquiry, such as those launched bin the energy and financial markets, may be more suitable than a UK probe.

A UK investigation would have to being at the Office of Fair Trading, which would refer the matter to the Competition Commission.

Another issue is whether online advertising should be considered a separate market or a relatively small part of the wider advertising sector.

Such questions have proven sticking points in other sectors such as retail, where the debate on whether supermarkets and corner shops should be considered as competitors remains undecided.

According to a recent Jefferies & Co report, in the US the total advertising market in 2006 was approximately $267 billion of which online advertising represented $16 billion, or 6 per cent.

Meanwhile, according to InternetAdSales.com there are at least 36 online advertising management companies, 47 advertising sales networks, and thousands of websites that sell ad space directly - figures that could boost Google's case.

However, in calling for a formal investigation, Lady Kingsmill cited market research that shows Google is the most visited internet destination in 13 of 16 European countries.

Research by Hitwise “found that in the four weeks to February 10 this year, Google powered a staggering 77 per cent of all internet searches in the UK”, she added.

According to the Internet Advertising Bureau, the trade body, Google accounted 43 per cent of the £2 billion spent on online advertising last year, up from 35 per cent in 2005. The figure represents more than 101 per cent of all UK advertising revenues.

“In short, this market is not only of growing strategic importance but also one that is dangerously unbalanced,” Lady Kingsmill said.

Google was unable to comment immediately when contacted by Times Online.

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