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Attendees mingle at Google's I/O conference in San Francisco yesterday. Google has disclosed that it has set aside $500m to potentially settle a US investigation into its adverts business. Marcio Jose Sanchez/AP
Google

Google sets aside $500m to settle US advertising probe

The search and advertising giant may be on the verge of admitting some wrongdoing in its online advertising practices.

GOOGLE HAS REVEALED it has set aside $500m for potential settlements with the United States Department of Justice over an ongoing investigation into its advertising practices.

The disclosure – mentioned in a single line as part of Google’s latest official quarterly filings – could indicate that the United States has found fault with the search giant’s advertising business, which is its major cash cow.

The massive payment had been set aside “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,” the filing said, adding:

“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.”

The company failed to offer any further details about the investigation or when it may have begun, and declined to comment when contacted by various agencies including Reuters.

The $500m chunk being set aside meant that Google’s net income for the quarter to just under $1.8bn for the three months to March 31, down from almost $2bn for the same period last year.

The disclosure follows developments last month when the US Federal Trade Commission began an investigation into Google’s practices, though that probe has yet to focus on any particular aspect of the company’s operations.

Google is facing other legal problems elsewhere in the world: last week the Belgian court of appeals ruled that the Google News service was in violation of the copyright of Belgium’s French-language newspapers.

Displaying excerpts of articles from newspapers underneath search results to those articles, the court found, was a violation of the copyright of those newspapers. Coverage of Flemish-language papers is not affected, however.