I have the same problem. Mine is not a new installation but an upgrade
from 12.04. Empathy had no trouble with Google Chat before the upgrade.

I am using two factor authentication on the Google account. I tried
generating a new application key and entered as password but that did
not fix the problem.

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https://bugs.launchpad.net/bugs/1069531

Title:
  Cannot login to Empathy after setting up Google online account

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