The WSJ is a bit short on detail and admits that no immediate court action is pending. However it seems that Google worked with EasyDownloadCenter.com and TheDownloadPlace.com from 2003 to 2005, generating more than $1.1 million in revenue for the sites through the AdSense program.
Both sites are now facing legal action for inducing others to infringe copyright. Both sites flogged a repackaged BitTorrent client and access to a P2P search system.
In that case it is claimed that Google reportedly noticed the amount of traffic and advertising served by the two web sites and assigned them an account representative to help make more cash off it.
The media companies seem to be muttering that this meant that Google was working with the pirates.
There's a little bit more here