Google settles Canadian pharma ad probe for $500 mn
25 Aug 2011
Google yesterday agreed to pay $500 million to settle US government charges for displaying fraudulent advertisements of Canadian pharmacies selling prescription and non-prescription drugs to US consumers.
The $500-million settlement, one of the largest ever in the US, represents the gross revenues Google collected from ads placed by Canadian pharmacies, plus the earnings made by Canadian pharmacies generated from the illegal sales of drugs to US consumers, federal investigators said.
An investigation by the US Attorney's office in Rhode Island and the US Food and Drug Administration (FDA) revealed that as early as 2003, Google was aware that online Canadian pharmacies were advertising prescription drugs to Google users in the US through Google's AdWords advertising programme.
The federal investigation said that although Google took steps to block pharmacies in countries other than Canada from advertising in the US, they continued to allow Canadian pharmacy advertisers to target consumers in the US.
The investigation revealed that the internet giant was aware that US consumers were making online purchases of prescription drugs from these Canadian online pharmacies, and that many of the pharmacies distributed prescription drugs, including controlled prescription drugs, based on an online consultation.
What was more damaging for the Mountain View, California-based company was the allegation that it was also aware that the Canadian pharmacies were charging a premium from US consumers for buying their drugs online without a valid prescription.
