The US Department of Justice (DOJ) [official website] on Wednesday announced that the agency had reached a $500 million settlement [press release] with Google [corporate website] for permitting Canadian pharmaceutical companies to advertise to and target US consumers. The advertising led to unlawful importation of controlled and non-controlled prescription drugs into the US, which constitutes violations of the Federal Food, Drug and Cosmetic Act and the Controlled Substances Act [texts]. The settlement amount is comparable to the combined gross revenue Google generated from the AdWords [product site] advertisements as well as the revenue earned by the Canadian pharmaceutical companies from introducing the prescription drugs to US markets. US Attorney Peter Neronha said the large settlement would act as a deterrent to drug manufacturers and online advertising companies:
This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google's knowledge and assistance, into the United States, directly to U.S. consumers. It is about taking a significant step forward in limiting the ability of rogue on-line 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.Pursuant to the agreement, Google acknowledges that it unlawfully advertised for the Canadian pharmaceutical company. The DOJ also enumerated several compliance guidelines aiming to prevent similar episodes.
The lawsuit against Google was the unintended result of an investigation into a string of "rogue online pharmacies" that used Google's AdWords to unlawfully market prescription drugs. Google filed a federal lawsuit [WSJ report] against the pharmaceutical advertisers in September 2010. The DOJ discovered advertisements for the unlawful sale of drugs on Google's AdWords during that investigation. AdWords allows advertisers, for a fee, to select keywords that, when searched by a Google user, bring up a link to the advertiser's website. The European Court of Justice (ECJ) [official website] said in an advisory opinion [materials; press release, PDF] handed down in September 2009 that Google's AdWords, a system that causes advertisements to be shown alongside natural search results on Google, does not violate EU trademark law [JURIST report].