- Nov 3, 2010
According to reports by the Daily Mail, the justice department was looking into whether Google tweaked its search results unfairly to favour its own services and breached competition laws to their own benefit. Possibly, facing a fine of 500 million dollars, similar allegations are being examined in Europe and by the Texas Attorney General.
There are also allegations that Google rigged its advertising system to hike prices. The facts were revealed in the annual report by the search engine giant to the Securities and Exchange Commission facing intense regulatory scrutiny.
A major part of Google’s revenue is generated through its flourishing advertising network that delivers short text ads alongside the search results and other content. The first quarter of the year alone saw Google selling 8.3billion dollars in advertising.
Google’s SEC report had earlier stated that its management had decided to set aside 500 million dollars as settlement in case of a suit. The move affected the company’s first-quarter earnings that were announced in mid-April. This led to a decline in their net income from 2.3billion dollar reported earlier to 1.8billion dollar. Investors are wary if such regulatory scrutiny can inflict more damages to Google who are facing some stiff competition especially from Facebook.