Google is no stranger to legal trouble. They have faced it on both domestic and international fronts, but recently, their legal woes kicked into higher gear. The Federal Trade Commission has been interested in Google, or rather its supposed anti-monopoly infractions, for years. The FTC served Google with formal notice in April that they will be reviewing the search engine’s business practices. What does this mean for Google?
According to Google, it doesn’t mean much. Google issued a response to the FTC investigation saying that, while they will cooperate fully, “It’s still unclear exactly what the FTC’s concerns are.” Executive chairman, Eric Schmidt, said that the company has already met with the FTC but he didn’t foresee it having any impact on operations. “We’ve had some meetings internally, (but) we haven’t changed anything.”
At the same time, Google is downplaying the drama publically and proceeding with a big launch of Google+, its new social experiment, and it is increasingly clear that the search giant is not taking the situation lightly. According to various sources, Google has hired no fewer than 12 lobbying firms to represent its interests in Washington.Despite what Schmidt says, the FTC probe and early-stage investigations in New York and Texas do have an impact on Google. Google’s shares have declined by 12 percent so far this year, and Morgan Stanley recently downgraded its rating from “buy” to “neutral.” The market responded immediately. While this is not strictly because of the FTC (Morgan Stanley analyst Scott Devitt cites Google’s increased spending on social as a main factor), it is certainly not helpful to have a government watchdog on your back.