Google Inc.’s (GOOG-Q536.63-6.03-1.11%
) lucrative online advertising system is facing a U.S. Justice Department investigation that is expected to cost the Internet search leader at least $500-million.
The disclosure made by Google on Tuesday in a quarterly report to the U.S. Securities and Exchange Commission serves as the latest reminder of the intensifying regulatory scrutiny facing the Internet’s most powerful company.
European regulators have opened a wide-ranging probe into whether Google unfairly manipulates its search results to favour its own services and rigs its ad system to drive up prices. The Texas attorney general also has been looking into complaints about whether Google’s search recommendations stifle competition.
The SEC documents filed Tuesday provided few details about the nature of the Justice Department’s inquiry except that it involves how Google’s automated system has been treating some unnamed advertisers. Google’s ad network, which primarily delivers short text ads alongside search results and other Web content, is the main way the company makes money. In the first three months of this year alone, Google sold $8.3-billion in advertising.
Google, which is based in Mountain View, Calif., declined further comment late Tuesday.