Should Investors Be Worried About Google’s Lawsuits?

Google (GOOG) hasn’t really had the best year so far. In fact, their name keeps popping up in lawsuits not only in the United States but abroad too. Just in the last few weeks, several media outlets including The New York Times, have reported that several European nations are frustrated with Google and accusing them of favoring their own products in their search engines, which hurts businesses not only overseas but in the United States too.

The European Union will be conducting an investigation, and they stated that if Google is found guilty of the anti-trust allegations then they will be forced to “change the way it does business in Europe.”

Most people are afraid to take on companies as big as Google, but this entire lawsuit was actually started by a couple, Adam and Shivaun Raff, who own a shopping comparison website called Foundem. Foundem was de-indexed by Google because of duplicate content; a move they say is ridiculous since shopping comparison websites by nature have to feature content from other sites to price compare.

As someone who has worked in the online space for nearly five years now, I have heard of people’s websites being de-indexed and causing website owners to lose thousands of dollars in revenue. Basically, by being de-indexed, Google will not allow your website to come up in any of their search rankings. And, if customers can’t find you, you can’t make any money. Because Google is so large, they can’t (or don’t) respond to each appeal after a site is flagged. This couple, though, won’t take no for an answer and they have the entire European Union now investigating their claim.

As stated previously, this isn’t the only legal issue Google is currently dealing with. Recently, Apple (AAPL) and Google agreed to pay a $324 million dollar settlement after being accused of “conspiracy to hold down salaries.” Essentially, they are being accused along with Intel (INTC) and Adobe Systems (ADBE) of arranging back door deals where they agreed not to poach each other’s employees. This meant that employees couldn’t switch jobs to get better salaries. They have, of course, denied the claims but both of these allegations together make for a bad reading in the media with respect to how Google is portrayed.

Investors who hold Google stock should definitely take notice. I don’t think the lawsuits create an urgent need to sell right now, but depending on how Google responds to them and how the European Union investigates the case could really impact the way Google handles their operations.

On the other hand, this could be just a blip on the radar that will soon be forgotten as other tech news comes our way. Still, keep an eye on these stories and how they evolve. I am personally very interested to see how the allegations in Europe pan out since I know several people who were personally affected by de-indexing and could never get their sites back on Google no matter how hard they tried.

What do you think of Google’s future? Will these lawsuits negatively affect them in any way?

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