Legal and Regulatory Issues
Google was subject to increased regulatory scrutiny that may have negatively impacted the
business. This was an increased risk with continued growth and corporate expansion. There
may be regulatory issues related to potential monopolistic power as the industry faced both
growth with expansion and consolidation.
Legal issues were a developing concern for Google. Many laws currently in place had been
enacted prior to the Internet age and thus could not have taken into consideration the business
practices and implications of the Internet and computer technology. Liability issues, such as
laws related to the liability of online services, remained uncertain and were thus a legal risk for
Google.
The Digital Millennium Copyright Act contained provisions that limited, but did not eliminate,
Google’s liability for listing or linking to third-party websites that included materials
that infringed copyrights or other rights, so long as the company complied with the statutory
requirements of the act. Various U.S. and international laws restricted the distribution of
materials considered harmful to children and imposed additional restrictions on the ability ofonline services to collect information from minors. Furthermore, in the area of data protection,
many states had passed laws requiring notification to users when there was a security breach
of personal data. One example was California’s Information Practices Act.8