Google has been given a public warning by EC competition commissioner Joaquin Almunia to respond to accusations from competitors that it is abusing its dominant position in the internet search marketplace.
The Competition Commission has been investigating Google over claims its search engine ranks its own property, such as YouTube, higher than its rivals'.
The Commission is also looking into accusations that Google's advertising breaks rules by blocking its competitors' ads.
The firm has also been accused of copying competitors' travel and restaurant reviews.
"If effective solutions were found quickly and tested successfully, competition could be restored at an early stage by means of a commitment decision," EU competition commissioner Joaquin Almunia said in the text of a speech to be delivered at Fordham University in New York.
"However, we are not there yet, and it must be clear that - in the absence of satisfactory proposals in the short term - I will be obliged to continue with our formal proceedings," he said.
The speech puts pressure on Google by making public the Commission's readiness to take a more aggressive line in negotiations.
The talks between the search giant and the Commission have been ongoing since July. The speech hints that very little progress has been made in talks to resolve the dispute and that few concessions have been made by Google.
If the case gets brought before the courts and the Commission is successful in showing a breach of competition law, Google may be fined 10 per cent of its worldwide revenues which for 2011 amounts to 2.9 billion (2.3 billion).
Almunia said proposals have to be valid worldwide and not just restricted to the EU. Google said it is currently working on meeting the Commission's demands.
"We continue to work cooperatively with the Commission," said Google spokesman Al Verney in a statement.
