Google Fined for Hyping Pill Mills

Google Fined for Hyping Pill Mills

By Ariel Nagi 08/26/11

Internet giant is smacked with half-a-billion in penalties for ads promoting illegal pharmacies.

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Google has been ordered to shell out a $500 million fine to settle charges that it knowingly ran illegal ads for fraudulent Canadian pharmacies to Internet users in the United States, the Justice Department announced yesterday. The  mammoth penalty, one of the largest in corporate history, spares the Internet giant from criminal prosecution in the matter. A federal investigation, which was made public in May, alleged that Google executives knew that many of the pharmacies it advertised sold drugs like Oxycontin and Ritalin without requiring prescriptions. But instead of declining to run the suspect ads, the government charges that Google kept accepting them—and in some cases even helped the pill mill improve their websites. In a statement issued following the Justice Department's announcement, the company admitted that “It’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place.” Indeed, Google policy had expressly banned similar ads in the past. The forfeiture covers revenue that Google earned from the advertisers as well as funds that the crooked Canadian pharmacies received from US customers—slashing Google's profit by 22% for this financial quarter. Illegal online pharmacies often stay under the radar and bounce back under different names if they get busted. In 2004, Sheryl Sandberg, a former vice president for Google's global online sales and now a top exec at Facebook, testified before the Senate that Google was keeping a strict watch on phony pharmacies. But a New York Times source claimed the company “did not turn a blind eye... but rather played a game of Whac-A-Mole with the rogue pharmacies.” The DOJ and others say Google knew about the problem and should have done more to address it. “Google does have a responsibility in this regard,” said Susan E. Foster, director of policy research and analysis at Columbia University’s National Center on Addiction and Substance Abuse. “To the extent that they allow ads for illegal pharmacies, they’re aiding and abetting the problem and profiting from it as well.”