Matt Cutts, the head of the webspam team at Google Inc. (NASDAQ:GOOG) has admitted that the search engine company often uses “exception lists” to prevent algorithms from affecting certain websites. This contradicts what Google’s lawyers said to European Union antitrust regulators.

Google Inc. (NASDAQ:GOOG) has been taken to court as part of an investigation by the Texas Attorney General. The case is over the fairness of their search engine rankings. The European Commission is also in talks with Google about the rankings.

Google Inc. (NASDAQ:GOOG) is being investigated by The European Commission as part of an anti-trust inquiry.  Three companies alleged that Google’s search functions were penalizing their own businesses.  The European Commission sent Google a set of questions about how their search functions work and they are also being asked how their ad business works.  The three websites Foundem, Ciao, and ejustice.fr complained about Google to the Commission.  Ciao is owned by Microsoft.

“Google has always used various penalty filters to remove certain sites entirely from its search results or place them so far down the rankings that they will never be found,” stated Foundem in a blog post last August.  “Whereas these penalties used to be reserved for spam, or sites caught attempting to cheat Google’s algorithms, they are now increasingly targeted at perfectly legitimate vertical search and directory services.” [Telegraph via Techmeme]