Google Forfeits $500 Million Over Drug Ads

Chris CrumBusiness

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The United States Department of Justice announced today that Google has agreed to forfeit $500 million for allowing Canadian pharmacies to place ads through Adwords, targeting consumers in the U.S. resulting in "unlawful importation of controlled and non-controlled prescription drugs into the U.S.

This is one of the largest such forfeitures ever in the U.S. and the DoJ says it "represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google's AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers."

$500 million. That's a pretty big forfeiture alright.

“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,” said Deputy Attorney General James Cole.  “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.” 

The question is: how will Google reform its practices?

Google has made a point of discussing the difficulties in this department in the past. In a blog post last September, as it filed a civil suit against advertisers, Google said, "Like many online services, we have struggled with this problem for years. It’s been an ongoing, escalating cat-and-mouse game—as we and others build new safeguards and guidelines, rogue online pharmacies always try new tactics to get around those protections and illegally sell drugs on the web. In recent years, we have noticed a marked increase in the number of rogue pharmacies, as well an increasing sophistication in their methods. This has meant that despite our best efforts—from extensive verification procedures, to automated keyword blocking, to changing our ads policies—a small percentage of pharma ads from these rogue companies is still appearing on Google."

"Litigation of this kind should act as a serious deterrent to anyone thinking about circumventing our policies to advertise illegally on Google," the post continued. "As we identify additional bad actors, we will add them to the lawsuit. Rogue pharmacies are bad for our users, for legitimate online pharmacies and for the entire e-commerce industry—so we are going to keep investing time and money to stop these kinds of harmful practices."

Google did disclose in a filing in May that it had set aside $500 million for a "Charge related to potential resolution of Department of Justice investigation."

“Today’s agreement demonstrates the commitment of the Food and Drug Administration to protect the US consumer and hold all contributing parties accountable for conduct that results in vast profits at the expense of the public health,” said the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA/OCI) Acting Director Martin-Weis.  “The result of this investigation has been a fundamental transformation of Internet pharmacy advertising practices, significantly limiting promotion to US consumers by rogue online pharmacies.  This accomplishment could not have been possible without the resourceful commitment of the Rhode Island United States Attorney’s Office, as well as the tireless efforts of our law enforcement partners detailed to the OCI Rhode Island Task Force.”

Google hasn't allowed prescription drug ads for quite a while. Will Google have to stop selling drug ads altogether?

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.