Germany's antitrust regulator said Tuesday it has opened an investigation into Google over anti-competitive practices, wielding a new law that has already been used to scrutinise other US tech giants.

The Federal Cartel Office will investigate European units of Google in Germany and Ireland, as well as its parent company, Alphabet, in California, it said in a statement.

The investigation will probe whether Google is considered to be "of paramount significance for competition across markets" due to the breadth of its digital products, Cartel office head Andreas Mundt said.

"Google's business model relies to a very large extent on processing data relating to its users," Mundt said. "Due to its established access to data relevant for competition, Google enjoys a strategic advantage."

A key question in the probe was "whether consumers wishing to use Google's services have sufficient choice as to how Google will use their data", he said.

Google spokesman Ralf Bremer said the tech giant would cooperate fully with the investigation.

"People choose Google because it's helpful, not because they're forced to, or because they can't find alternatives," he said, adding that German consumers are offered "simple controls to manage their information and limit the use of personal data".

Germany's antitrust investigation into Google follows the application of a new law giving the authorities more power to rein in big tech companies
Representational Image AFP / Tobias SCHWARZ

Under the amendment to Germany's competition law passed in January, the watchdog said it now has more power to "intervene earlier and more effectively" against big tech companies, rather than simply punishing them for abuses of their dominant market position.

The Federal Cartel Office said last week it is examining whether Amazon has "an almost unchallengeable position of economic power", having already launched two traditional abuse control proceedings.

If so, it too could be deemed of "paramount significance", Mundt said last week, adding that the regulator could "take early action against and prohibit possible anti-competitive practices by Amazon".

The watchdog has also employed its new powers to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits.

Germany and France have also joined calls from the United States to impose a global minimum corporate tax of at least 15 percent, a move which targets huge multinationals like Amazon and Google.

Critics have repeatedly warned that many of the world's biggest companies use tax havens or used loopholes little to no tax, far less than some individuals.