"The latest offer as submitted by Google in October ... the latest proposals are not acceptable in the sense that they are not proposals that can eliminate our concerns regarding competition," competition Commissioner Joaquin Almunia said Friday in a Spanish radio interview reported by Britain's The Guardian.
Google's latest offer did not remove the commission's concerns about the way Google's rivals in so-called vertical searches -- searches for price comparison products -- were being treated, he said.
Google had proposed giving rival shopping sites limited space as part of a larger Google Shopping box.
"We've made significant changes to address the EC's concerns, greatly increasing the visibility of rival services and addressing other specific issues," Google said in a statement.
Lobbying group ICOMP, funded by Microsoft, lauded Almuni's decision.
"Our members will welcome Vice President Almunia's decision that Google's second set of proposals are 'unacceptable,'" ICOMP legal counsel David Wood said. "Google was offered not one but two unique opportunities to reach an agreement with the commission and yet their actions show a deep lack of willingness to change their harmful practices."