The European Commission has launched an investigation to determine whether Internet giant Google’s online advertising practices are anti-competitive.

The EC received three complaints about the company, including one from a subsidiary of Microsoft, a company whose own practices have attracted a number of antitrust investigations over the years.

Two of the complaints – from a UK comparison site and French legal search engine –allege that Google demotes these companies pages in its search rankings, supposedly because they offer competing services. The third complaint, from a European comparison site called Ciao! that was acquired by Microsoft in 2008, concerns Google’s standard “terms and conditions”, the search giant.

Google revealed that it was under investigation in an official blog post yesterday. “This kind of scrutiny goes with the territory when you are a large company,” it said, adding that “we are confident that our business operates in the interests of users and partners, as well as in line with European competition law”.

It has already proven a legally troubling week for Google. Yesterday, three of the company’s executives, including chief legal officer David Drummond and its global privacy counsel Peter Fleischer, were found guilty of negligence by an Italian court, after a video depicting a teenager with Down’s syndrome being bullied was posted on its Google Video site. The company plans to appeal the six-month jail setence handed to its employees.

Meanwhile, Google – along with Yahoo! – was sued by printer and document management vendor Xerox, which claims the Internet companies have infringed upon two of its search technology patents. According to the Wall Street Journal, the companies will fight the charges.