Google has agreed to “forfeit” $500 million for carrying ads from illegal online Canadian pharmacies, the Justice Department announced on Wednesday -- one of the biggest fines paid in such a case.
The U.S. Attorney’s office for Rhode Island said the $500 million equals gross sales that Google earned from the ads, and revenues the Canadian online pharmacies earned from resulting sales to U.S. consumers.
A Google spokesman said in a statement that the company banned advertising from Canadian pharmacies “some time ago." But, he added, "it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further."
The Justice Department said the sales may have violated the federal Food, Drug, and Cosmetic Act and the Controlled Substances Act. The importation of prescription drugs from Canada and other countries is illegal because the Food and Drug Administration cannot ensure the safety and effectiveness of such drugs.
An investigation by the U.S. Attorney for Rhode Island and the FDA found that Google knew as early as 2003 that Canadian pharmacies were advertising to U.S. consumers using Google’s AdWords program, according to a Justice Department statement. While Google blocked ads for other foreign online pharmacies, it continued to allow the Canadian Internet drug stores to place them and even helped some do so.
Justice said Google took steps in 2009 in response to the federal investigation to try to block illegal prescription drug sales from Canada, including requiring online pharmacy advertisers to sign up for a certification program run by the National Association of Boards of Pharmacy.
“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 U.S. consumers,” said U.S. Attorney for Rhode Island Peter Neronha in a statement.
“It is about taking a significant step forward in limiting the ability of rogue online 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.” Justice said Google has acknowledged it improperly helped online Canadian pharmacies and agreed to compliance and reporting measures aimed at preventing future misconduct.
Justice said the investigation into the Canadian online pharmacy sales and Google AdWords stemmed from an unrelated fraud investigation involving a man who fled to Mexico and started using Google AdWords to advertise illegal drugs.