Second, firms in a dominant position may not abuse that position (Article 82 of the EC Treaty). This is for example the case for predatory pricing aiming at eliminating competitors from the market.

Since 1 May 2004, all national competition authorities are also empowered to apply fully the provisions of the Treaty in order to ensure that competition is not distorted or restricted.

AFAIK the key objection is to a unique user identifier that is generated during installation and is used as a permanent quasi cookie for any communication with Google.com. Also it is critizised that the software installs in data directories and can be installed without privileges (*).

@Matt Cutts: The objection to the unique identifier was the same with MS Office years ago and the public outcry was MUCH louder. Few people here so far understand that GOOG keeps 2% of the communication between Omnibox and Google.com – which is tagged with the unique user identifier. Thus RIAA, police, NSA can use that (when given access by the courts) and will be able to identify a certain number of people as shown in the AOL case.

European countries cannot leave their citizens' privacy to US courts. If you want to run your business in the EU you better deal with it – MSFT did. If not: stay in the bay area.

If we want to talk about actual (as opposed to perceived) danger to privacy, I believe IE8b2 is more of a risk--see my comments about the "Suggested Sites" feature of IE8b2.