There are some lawyers in Germany that already now presume that Google Analytics is illegal: http://eu.techcrunch.com/2009/11/24/google-analytics-illegal.... And due to the German "Abmahnung" law (see http://en.wikipedia.org/wiki/Abmahnung) it's rather easy for them to "fine" you if you use it anyway: "One German lawyer that gets cited in the article says the penalties could amount up to €50,000 (about $75,000) per website that uses Google Analytics to keep track of its visitors’ usage patterns."
They are not suing Google. They are suing website owners using Google Analytics without consent from the users. They tried to reach an agreement with Google first.