Google (GOOG, Financial) hasn't had the best time in the market throughout the year so far. As a matter of fact, when compared to other giants in the tech space like Apple (AAPL, Financial), Amazon (AMZN, Financial), and Microsoft (MSFT, Financial), Google's stock just isn't up to par. So I figured I'd take a look at Google to see why investors simply aren't as bullish on this stock as others in the industry. What I found was pretty interesting...
Google is the target of several lawsuits
When searching for things that may be causing lulls in Google's activity in the market, I came across a ton of good news about the company. However, there was one bad piece of news that kept taking the spotlight from the positivity. Google has been the subject of a slew of legal battles recently. To add icing to the top of the cake, the legal battles aren't simply limited to the United States; Google is facing legal issues abroad as well.
Legal issues Google is currently facing
There are a few legal issues I was able to dig up in very little time. They include ...
European Union Investigation – The European Union recently announced that it will be conducting an investigation into antitrust allegations against Google. They've also made it very clear that, if they find that Google is guilty after their investigation of the allegations, they will force Google to “change the way it does business in Europe.”
Small Businesses Fighting Back – Small businesses like product comparison websites rely heavily on Google to be successful. The reality is that where Google sends people is where they go online. However, a comparison company owned by Adam and Shivaun Raff recently started a lawsuit against Google for de-indexing their website. Google states that the reason for de-indexing is duplicate content. However, the Raffs contend that a good comparison website will need duplicated content for side-by-side comparisons and that Google's de-indexing has cost them a ton of money.
Recent Settlement – Google was also involved in a recent settlement with U.S. authorities for their involvement in a “conspiracy to hold down salaries.” The idea is that Google, Apple, Intel (INTC, Financial) and Adobe Systems (ADBE, Financial) arranged a behind-the-scenes agreement, agreeing not to poach each other's employees. As a result, competition in the tech employment space thins, resulting in the ability to keep current employees at lower wages. While the companies denied the claims, Google and Apple have agreed to pay a $324 million settlement as a result of the allegations.
Back to the big question: Should investors be worried?
It seems like the biggest concern for Google investors is legal battles; and I have to admit, it's a good reason to be concerned. If European officials do find wrongdoing, it could spell disaster for the company's stock. Not to mention, other lawsuits popping up add more red flags to the way the company is conducting business. However, it's also important to remember that large companies are likely to face legal battles here and there. Nonetheless, if any have the financial strength to ward these hindrances off, it's giant tech companies like Apple and Google that have the ability.
