Google forfeits $500 million for running illegal pharmacy ads

Posted by Emma Woollacott

Google's agreed to pay out $500 million to settle claims that it profited from ads for illegal Canadian pharmacies. It's one of the biggest financial forfeiture penalties ever.

By allowing the companies to place ads through the AdWords program, says the Justice Department, the company contributed to the illegal import of controlled and non-controlled prescription drugs. Google, says the Justice Department, knew it was illegal as early as 2003.

"This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian online pharmacies, with Google’s knowledge and assistance, into the United States, directly to US consumers," says US attorney Peter F Neronha.

"It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching US consumers, by compelling Google to change its behavior. It is about holding Google responsible for its conduct by imposing a $500 million forfeiture, the kind of forfeiture that will not only get Google’s attention, but the attention of all those who contribute to America’s pill problem."

The US Attorney’s Office in Rhode Island says Google knew as long as eight years ago that overseas pharmacies were advertising through AdWords - and, while it blocked the pharmacies from other countries, it allowed the Canadian ones to continue.

Indeed, over the next six years, Google even gave the pharmacies help in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites.  

The Justice Department probe came about by chance, as part of an investigation into a multi-million-dollar financial fraud. The main suspect fled to Mexico and started selling banned drugs through Adwords. When he was finally caught, he cooperated with the Justice Department and spilled the beans about his use of AdWords.

Google's now promised to introduce a series of compliance and reportng measures designed to make sure that it doesn't happen again.