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There’s a big surprise in Google’s just-released quarterly SEC filing. In one short paragraph, the company discloses that it may soon be dealing with a $500 million fine due to a Department of Justice investigation.
The filing says almost nothing about what the investigation is about — just that it relates to “the use of Google (NSDQ: GOOG) advertising by certain advertisers.” A Google spokesman said only: “As this is a legal matter, we’re not going to comment on it.”
What could such a large penalty stem from? Perhaps Google ads were popping up on some kind of sites that DOJ decided were really, really bad sites. Could they have been sites related to piracy? Online gambling? Sites with spyware or really awful privacy issues?
The full paragraph, on page 29 of the 10-Q, reads:
Charge Related to Potential Resolution of Department of Justice Investigation
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 $500 million 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.
Whatever the cause, we’ll probably find out more soon. I doubt Google would be reporting this charge if it expected this investigation was going to ultimately go away. If the fine ends up being $500 million, it’ll be up there in the pantheon of biggest tech-company fines of all time; although still smaller than the $1.3 billion fine against Microsoft (NSDQ: MSFT) that European regulators levied in 2008, and the $1.45 billion fine against Intel (NSDQ: INTC) in 2009.