Google Pays $500M to Avoid DOJ Prosecution on Drug Ads

pillsGoogle will forfeit $500 million, one of the largest financial forfeiture penalties ever, to avoid criminal prosecution by the Department of Justice. Google was under investigation for profiting off advertising from Canadian pharmacies illegally selling prescription and non-prescription drugs.

An SEC filing in May revealed that Google had already put aside the $500 million “in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers…”

Google knew as early as 2003 that AdWords was allowing illegal sales to Americans to occur, according to the AP report. Some of the transactions included sales from unlicensed practitioners and sales to people without prescriptions, resulting in the illegal importation of drugs into the United States. The investigation was conducted by the U.S. Attorney’s Office in Rhode Island, the Food and Drug Administration, and other agencies.

“The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers,” James Cole, deputy attorney general, said in a statement. “This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history.”

According to a Google spokesperson: “We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

Google’s AdWords policy was updated in February 2010 to “only accept ads from pharmacies accredited by the National Association Boards of Pharmacy VIPPS program, and from online pharmacies in Canada that are accredited by the Canadian International Pharmacy Association (CIPA). Pharmacies will be restricted to advertising to consumers in their country. U.S. pharmacies can only advertise to U.S. consumers and Canada to Canadian consumers.”

Google followed up in December by filing a civil lawsuit against “rogue pharmacies” in New York, Tennessee, and Ohio that deliberately broke Google’s advertising rules. “Google has obtained court orders banning some of the rogue pharmacies named in the lawsuit and is still seeking injunctions against the others,” the AP noted.

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