Google to pay US$500m over drug ads
Source: Agencies |
August 25, 2011, Thursday
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GOOGLE has agreed to pay US$500 million to settle a United States government investigation into the Internet search leader's distribution of online advertisements from Canadian pharmacies illegally selling prescription and non-prescription drugs to US consumers.
US attorney Peter Neronha said yesterday the settlement means Google will not face criminal prosecution on charges that it improperly profited from ads promoting Canadian pharmacies illegally importing drugs into the US.
The US$500 million represents the gross revenues Google took for the Canadian pharmacies' adverts, plus earnings generated from illegal sales of drugs to US consumers, according to federal investigators.
Prosecutors also said Google knew as early as 2003 that its ad system was allowing Canadian pharmacies to make illegal sales, including the sale of prescription drugs without a prescription from a licensed medical practitioner.
Shipping prescription drugs into the US from abroad is illegal. Such drugs shipped into the US from Canada are not subject to oversight by Canadian regulatory authorities, and other traders sell drugs from countries with inadequate pharmacy regulations, according to prosecutors.
The investigation exposed how vulnerable the company's automated ad system, known as AdWords, is to shady operators. The system is a major money-maker for Google and is expected to generate more than US$30 billion in revenue this year.
Google acknowledged there are holes in its ad system in a federal lawsuit filed last year against dozens of rogue online pharmacies that were finding ways to place ads for drugs despite the company's efforts to prevent abuses. The individuals identified in the complaint were in New York, Tennessee and Ohio.
In one of the more common practices, illicit dealers would use subtle misspellings of drug names frequently entered into Google's search engine. For instance, one advertiser spelled anabolic steroid Dianabol as "Diano bol" in Google's automated system to produce an ad, according to the lawsuit.
Google has obtained court orders banning some of the pharmacies named in the lawsuit and is seeking injunctions against others.
Prosecutors have been aggressively investigating such activities. Last year Chinese company GeneScience Pharmaceutical and its chief executive admitted selling human growth hormones and agreed to pay US$7.5 million.
The Google lawsuit came seven months after it imposed new restrictions on the kind of pharmaceutical ads it would accept in the US and Canada.
The new rules were supposed to allow ads only from US and Canadian accredited pharmacies.
US attorney Peter Neronha said yesterday the settlement means Google will not face criminal prosecution on charges that it improperly profited from ads promoting Canadian pharmacies illegally importing drugs into the US.
The US$500 million represents the gross revenues Google took for the Canadian pharmacies' adverts, plus earnings generated from illegal sales of drugs to US consumers, according to federal investigators.
Prosecutors also said Google knew as early as 2003 that its ad system was allowing Canadian pharmacies to make illegal sales, including the sale of prescription drugs without a prescription from a licensed medical practitioner.
Shipping prescription drugs into the US from abroad is illegal. Such drugs shipped into the US from Canada are not subject to oversight by Canadian regulatory authorities, and other traders sell drugs from countries with inadequate pharmacy regulations, according to prosecutors.
The investigation exposed how vulnerable the company's automated ad system, known as AdWords, is to shady operators. The system is a major money-maker for Google and is expected to generate more than US$30 billion in revenue this year.
Google acknowledged there are holes in its ad system in a federal lawsuit filed last year against dozens of rogue online pharmacies that were finding ways to place ads for drugs despite the company's efforts to prevent abuses. The individuals identified in the complaint were in New York, Tennessee and Ohio.
In one of the more common practices, illicit dealers would use subtle misspellings of drug names frequently entered into Google's search engine. For instance, one advertiser spelled anabolic steroid Dianabol as "Diano bol" in Google's automated system to produce an ad, according to the lawsuit.
Google has obtained court orders banning some of the pharmacies named in the lawsuit and is seeking injunctions against others.
Prosecutors have been aggressively investigating such activities. Last year Chinese company GeneScience Pharmaceutical and its chief executive admitted selling human growth hormones and agreed to pay US$7.5 million.
The Google lawsuit came seven months after it imposed new restrictions on the kind of pharmaceutical ads it would accept in the US and Canada.
The new rules were supposed to allow ads only from US and Canadian accredited pharmacies.
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