Wednesday, August 24, 2011

Google to forfeit $500 million for drug ads

By James M. Connolly

Putting an end to a federal criminal investigation, Google Inc. has agreed to forfeit to the government $500 million for accepting advertisements from Canadian pharmacies targeting sales in the U.S.

The U.S. Department of Justice announced the agreement in Providence, R.I., where the investigation began in 2003. In a press release, Justice Department officials emphasized that it is illegal in almost all cases for pharmacies outside the U.S. to ship drugs to customers in the states, and that Google was aware of that fact as early as 2003. The Canadian pharmacies advertised through Google’s AdWords program. The $500 million payment is based on revenue received by Google from the pharmacies and revenue that the pharmacies gained from sales to U.S. consumers.

“This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google’s knowledge and assistance, into the United States, directly to U.S. consumers,” said U.S. Attorney for Rhode Island Peter F. Neronha in the Justice Department release. “It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. 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 news site CNET quoted a Google official as saying, "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."