How often do you wade through the regulatory filings of dotcoms? Not the most exciting of digital papers, but a tenacious researcher would have spotted one interesting item in Google’s recent footnotes – a $500m fund to settle the probe from US Department of Justice investigation into its ad practices. An accounting trick to reduce profits, or the expectation that there is a storm coming?
In a regulatory filing, the web giant said it had set aside $500m “in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers”.
“Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.”
Google has not explained which aspect of its advertising is under investigation, but press reports suggest the search advertising system AdWords in the most likely contender, generating 97 per cent of its $8.58bn revenues in the first quarter of this year.
Google is already under investigation by the European Commission for allegedly abusing its dominance by both relegating rival services in search rankings and and promoting its own secondary ventures, such as its price comparison engine.
And in March Google was forced to agree to a long-term regime of privacy inspections after the Federal Trade Commission investigated the launch of its Buzz social network. Earlier this month it was reported that the regulator is also going ahead with a broad anti-trust investigation.