Google agrees to forfeit US$500m of revenue from drugs ads
Search advertising giant Google has agreed to forfeit US$500m of revenue generated by online ads and prescription drug sales by Canadian online pharmacies that were placed through its AdWords programme and which targeted US consumers.
The US Department of Justice said today that the ads led to the unlawful importation of controlled and non-controlled prescription drugs into the US.
The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.
The US Department of Justice said that the importation of prescription drugs to consumers in the US is almost always unlawful because the Federal Drug Administration (FDA) cannot ensure the safety and effectiveness of foreign prescription drugs that are not FDA-approved.
“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,” said U.S. Attorney Neronha.
“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.”
A bitter pill for Google to swallow
The Department of Justice said that an investigation by the US Attorney’s Office in Rhode Island and the FDA/OCI Rhode Island Task Force revealed that as early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google’s AdWords advertising program.
It said that although Google took steps to block pharmacies in countries other than Canada from advertising in the US through AdWords, it continued to allow Canadian pharmacy advertisers to target consumers in the United States.
It says Google was aware that U.S. 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 rather than a valid prescription from a treating medical practitioner.
Google was also on notice that many pharmacies accepting an online consultation rather than a prescription charged a premium for doing so because individuals seeking to obtain prescription drugs without a valid prescription were willing to pay higher prices for the drugs.
In 2009, after Google became aware of the investigation by the Rhode Island U.S. Attorney’s Office and the FDA/OCI Rhode Island Task Force of its advertising practices in the online pharmacy area, and as a result of that investigation, Google took a number of steps to prevent the unlawful sale of prescription drugs by online pharmacies to U.S. consumers.
Among other things, Google began requiring online pharmacy advertisers to be certified by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practices Sites program, which conducts site visits; has a stringent standard against the issuance of prescriptions based on online consultations; and, most significantly, does not certify Canadian online pharmacies.
In addition, Google retained an independent company to enhance detection of pharmacy advertisers exploiting flaws in the Google’s screening systems.
“Under the terms of an agreement signed by Google and the government, Google acknowledged that it improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted the United States through AdWords, and the company accepts responsibility for this conduct. In addition to requiring Google to forfeit $500 million, the agreement also sets forth a number of compliance and reporting measures which must be taken by Google in order to insure that the conduct described in the agreement does not occur in the future.
The Department of Justice in the US says that the investigation of Google had its origins in a separate, multimillion dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico.
“While a fugitive, he began to advertise the unlawful sale of drugs through Google’s AdWords program. After being apprehended in Mexico and returned to the United States by the U.S. Secret Service, he began cooperating with law enforcement and provided information about his use of the AdWords program.
“During the ensuing investigation of Google, the government established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through Google’s AdWords program.