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Google forfeits $500m after serving ads for Canadian drugs

A very bitter pill to swallow
Thu Aug 25 2011, 18:13

ADVERTISING BROKER Google has given up $500m in revenue it allegedly gained from advertisements for drugs shipped into the US from Canada.

The US Department of Justice (DOJ) investigated claims that Google profited from serving adverts that promoted online pharmacies. The drugs sold by some of these outlets allegedly were imported into the US illegally. The DOJ claimed that Google's forfeiture of $500m is "one of the largest in the United States" and represents the gross revenue received by Google from the Canadian pharmacies that peddled the drugs plus the gross revenue made by the pharmacies themselves.

Google's double hit will serve as a warning for all online advertising brokers, highlighting the need for tighter controls over the acceptance of ad campaigns. According to the DOJ, it seems most pharmaceuticals imported into the US are illegal because the Food and Drug Administration is not able to ensure the safety and effectiveness of the medication. This is pretty obvious, so it is a bit surprising that Google might have made such a costly mistake.

Mistake or otherwise, deputy attorney general Cole didn't flinch on his assessment of the case, saying, "The DOJ 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 [...] 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."

US attorney Neronha said that Google's forfeiture should serve as a warning to others, saying, "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."

For Google, losing $500m is a serious financial hit, but what's far worse is that it should have known that playing fast and loose with import restrictions could land it in serious hot water. µ

 

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