Google Analytics is a third party service that is tracking users' behaviour around the Internet, quite possibly without their knowledge or consent. It doesn't matter what the original site operator can see. Google can see everything. This is exactly the kind of shady behaviour that this law is supposed to prohibit, and Google getting screwed on this point appears to be in keeping with both the letter and the spirit of the law.
Google Analytics uses a 1st-party cookie set by the website that runs it.
http://code.google.com/apis/analytics/docs/concepts/gaConcep...