The actual settlement, one of the largest ever in the United States, according towards the Justice Department, covers the gross revenue received by Google as a consequence of Canadian pharmacies advertising through Google's AdWords program, and the gross revenue produced by those pharmacies from their sales to U. S. consumers.
"The Department of Justice will continue to hold accountable companies who within their bid for profits violate federal law and put at risk the safety and health of American consumers, " said Deputy Attorney General James M. Cole. "This settlement ensures that Google will reform its improper advertising practices regarding these pharmacies while paying one of the largest financial forfeiture penalties ever. "
In May, the company disclosed a $500 million charge taken against its first quarter leads to cover potential charges related to the Justice Department investigation. This morning, in its first comments about the case, Google expressed contrition about its actions, and said it has changed the way in which its accepts ads for pharmacies.
"We banned the advertising of prescription drugs within the U. S. by Canadian pharmacies some time ago, " a spokesman for that company said in an email. "However, it's obvious with hindsight that we shouldn't have allowed these ads on Google to begin with. "
Under the terms of the agreement with the Justice Department, Google acknowledged that it "improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted america through AdWords. " In addition to the fine, Google agreed to several compliance and reporting measures "to insure that the conduct described in the agreement does not occur later on. "
The Justice Department's investigation began with an international chase of the fugitive, who had allegedly perpetrated a multimillion dollar fraud. According to the actual agency, the fugitive, who fled to Mexico, began advertising the unlawful purchase of drugs through AdWords. Mexican authorities apprehended the fugitive, turned him to the U. S. Secret Service, at which point he began cooperating, detailing his utilization of AdWords. As part of the investigation, the government created "undercover websites" to market illegal drug sales using AdWords.
Regulators investigated whether Google violated the Government Food, Drug and Cosmetic Act and Controlled Substances Act by allowing Canadian Internet pharmacies place ads through AdWords targeting consumers in the usa. The agency determined that those ads led to the "unlawful importation of controlled and non-controlled prescription drugs into america. " Moreover, the agency said that Google was aware "as early as 2003" from the illegality of pharmacies shipping both controlled and non-controlled prescription drugs into america from Canada.
Congress created those laws to prevent importation of drugs which have not been approved by the U. S. Food and Drug Administration. The Justice Department also noted that regardless of the Canadian regulatory rules regarding prescription drugs, pharmacies that ship those drugs to america are not subject to that country's regulatory authority. What's more, the company noted, many of those online pharmacies sell drugs obtained from countries besides Canada "which lack adequate pharmacy regulations. "
The Justice Department was clear it wanted to send a message with its fine that it won't endure companies abetting rogue pharmacies selling potentially dangerous drugs to Americans.
"It is all about taking a significant step forward in limiting the ability of rogue on-line pharmacies through reaching U. S. consumers, by compelling Google to change its behavior, inch said Peter F. Neronha, U. S. Attorney for the District of Rhode Isle, whose office conducted the investigation. "It is about holding Google responsible because of its conduct by imposing a $500 million forfeiture, the kind of forfeiture that won't only get Google's attention, but the attention of all those who bring about America's pill problem. "
The Justice Department noted that Google took steps in block pharmacies from countries other than Canada from advertising in the usa through AdWords. But the company continued to accept ads from Canada, in spite of being "on notice. " Moreover, Google was aware that Americans were buying prescription medications based on online consultations rather than valid evaluations from a patient's physician. And, according to the agency, Google knew that those patients were prepared to pay premiums for prescription drugs because their could obtain them without the valid prescription.
Perhaps most damning, Google provided customer support to some of those pharmacies from 2003 in order to 2009 to help them place and optimize their ads and improve the potency of their websites.
Google began addressing the issue in 2009, requiring online pharmacy advertisers to become certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Methods Sites program. The trade group, among other things, doesn't certify Canadian on the internet pharmacies. Google also retained an unnamed independent company to beef up it's detection of rogue pharmacies advertisers.