Byline: From Daniel Bates in New York
GOOGLE is facing a U.S. inquiry into its advertising business that could cost it [euro]350million.
The internet search giant will be investigated by the U.S. Department of Justice to see if its lucrative online advertising system has unfairly favoured some companies over others.
It has put aside [euro]350million as a war chest to pay for any fine it receives. Google made the admission in a regulatory filing in the U.S. but did not reveal any more details or name the advertisers which have complained.
It is already facing a similar investigation by EU regulators and has come under scrutiny over its business practices in the U.S. The company has also earned a sharp rebuke from privacy campaigners over its controversial Streetview service after it collected data from unencrypted wi-fi networks whilst carrying out filming.
In the filing to the U.S. Securities and Exchange Commission, Google wrote: 'In May 2011, 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, we accrued $500million for the three month period ended March 31, 2011.
'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 a stranglehold over the expanding market in internet searches - two out of every three U.S. web trawls are conducted through Google, with its share rising to 19 out of 20 in Europe.
Google's adverts raked in [euro]5.7billion in the first three months of the year alone.' Rivals such as Microsoft have long complained that Google impedes competition by blocking rival products from coming up near the top of its searches, an allegation the company denied.
But regulators have taken an interest and the EU has opened a wide-ranging investigation into whether Google unfairly manipulates its search results to favour its own services and rigs its advertising system to drive up prices. The Texas attorney general has also been looking into complaints about whether Google's search recommendations stifle competition. And in March Google finally agreed to privacy inspections after the U.S. Federal Trade Commission investigated the launch of its Buzz social network. The regulator is also reportedly going ahead with its own broad anti-trust investigation.
The investigations come as the company yesterday threatened to wipe photographs of streets and houses in Switzerland from its online maps unless the country overturns a ruling requiring a guarantee of anonymity for people captured on its Streetview service.
Shutting down Streetview in an entire country would be Google's most severe response yet to complaints it is violating people's privacy.
reporter@dailymail.ie
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