Google to pay $500m over unlawful drug ads
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Thursday 25 August 2011
Google has agreed to a half-a-billion-dollar settlement with the US government for allowing online Canadian pharmacies to place adverts targeting American consumers that led to unlawful prescription drug imports.
The $500m (£305m) sum represents the gross revenues earned by the California-based search engine giant as a result of the ads, plus that those netted by the Canadian pharmacies from their sales to US customers.
"The Department of Justice will continue to hold accountable companies who, in their bid for profits, violate federal law and put at risk the health and safety of American consumers," said the Deputy US Attorney General, James Cole. "This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history."
Importing prescription drugs into the US is "almost always unlawful", the Justice Department said, adding that its agreement with Google also includes measures to ensure that the issue does not recur. Google, which had already put aside $500m to settle an investigation into its advertising practices, said it had "banned the advertising of prescription drugs in the US 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," a spokesman admitted.
The Justice Department said an investigation had showed that, "as early as 2003", the search engine was on notice that online Canadian pharmacies were using its Adwords program to advertise prescription drugs to Google users in the US.
"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," the US Attorney for Rhode Island, Peter Neronha, said.
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