Google says it should not have run online ads for Canadian pharmacies that illegally shipped drugs to U.S. consumers.
Slideshow: Top 15 Google Apps ForBusiness
(click image for larger view and for full slideshow)
Google has agreed to pay $500 million to settle allegations that it sold hundreds of millions of dollars worth of online ads to Canadian pharmacies that shipped drugs to U.S. consumers in violation of federal law.
The settlement represents the culmination of an investigation led by the U.S. Attorney's Office in Rhode Island and the Food and Drug Administration's Office of Criminal Investigations.
The investigation found that Google as early as 2003 was aware that Canadian pharmacies were advertising prescription drugs in the U.S. through Google's AdWords program and that while the company had taken steps to block advertisements for pharmacies in other countries, Canandian pharmacies were allowed to continue advertising.
The Department of Justice say that shipping prescription drugs from pharmacies outside the country to U.S. customers generally violates the Federal Food, Drug and Cosmetic Act, and, in the case of controlled prescription drugs, the Controlled Substances Act.
Peter F. Neronha, U.S. Attorney for the District of Rhode Island, said in a statement that the investigation represents a significant step in limiting the ability of rogue pharmacies to reach U.S. consumers with drugs that may be unsafe and/or unlawful.
"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," he said.
Google demonstrated that it was paying attention in 2009 when, after it became aware of the investigation, the company began taking steps to limit the unlawful sale of prescription drugs to U.S. consumers. The company now requires online pharmacy advertisers to be certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practices Sites program.
Last September, the company sued a number of individuals associated with rogue online pharmacies for attempting to circumvent its AdWords policies.
"We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago," a Google spokesperson said in an emailed statement. "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."
Attend Enterprise 2.0 Santa Clara, Nov. 14-17, 2011, and learn how to drive business value with collaboration, with an emphasis on how real customers are using social software to enable more productive workforces and to be more responsive and engaged with customers and business partners. Register today and save 30% off conference passes, or get a free expo pass with priority code CPHCES02. Find out more and register.