Google to Pay $500M to Settle Canadian Prescription Drug Sales Case

Author: Isabel McFadden
Published: August 26, 2011 at 8:10 am
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The Department of Justice announced on Thursday that Google, Inc. will pay a $500 million forfeit to settle a government investigation that found the company allowed online Canadian pharmacies to place advertisements targeting consumers in the United States through its AdWords program. The ads facilitated the illegal importation of controlled and non-controlled prescription drugs into the United States. The $500 million fine represents the amount Google earned selling the ads plus the revenue earned from the prescription drug sales by the Canadian online pharmacies. Peter F. Neronha, U.S. Attorney for the District of Rhode Island, described the forfeiture as one the largest in history.

The DOJ investigation began in 2008 after the main target of a separate, unrelated multimillion dollar financial fraud investigation was apprehended in Mexico and returned to the United States. That suspect, David Whitaker, told federal investigators that as a fugitive he began to advertise the unlawful sale of drugs through Google’s AdWords program. After his arrest, Whitaker provided information on his use of the AdWords program and helped established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through AdWords.

The investigation by the U.S. Attorney’s Office in Rhode Island and the FDA/OCI Rhode Island Task Force revealed that Google was aware as early as 2003, that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google’s AdWords advertising program. The DOJ statement issued Thursday made it clear that Google had failed to stop the online pharmacies. Although the it took measures to prevent pharmacies in other countries from advertising to US consumers, Google “continued to allow Canandian pharmacy advertisers to target consumers in the United States.” The announcement also made emphasized that Google acknowledged “that it improperly assisted Canadian online pharmacy advertisers" in placing and optimizing their AdWords advertisements as well as improving the effectiveness of their sites.

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