Google Pays $500M in Drug Deal: Bad Ads Never Pay

Looks like Google is going to shell out $500 million from their own pockets as they settle government charges for online pharmacy ads that were illegally shown on the search giant’s website.

Google Inc. has reached a $500 million legal settlement with the U.S. Justice Department to avoid prosecution over allegations that it knowingly accepted hundreds of millions of dollars in ads from Canadian online pharmacies.

The investigation, which was first made in May, revealed that illegal ads from online pharmacies were shown together with Google’s search results. These pharmacies were operating illegally, as they were found to fail in requiring a prescription or selling counterfeit drugs. With this move, Google was forced to set aside a large amount of settlement money that shaved off 22 percent of its quarterly profit.

Despite its effort to prevent this from happening, the Mountain View, California-based company stated that these illegal pharmacies are hard to regulate, as they always find new ways to get around the rules.

Like many online services, we have struggled with this problem for years. It’s been an ongoing, escalating cat-and-mouse game—as we and others build new safeguards and guidelines, rogue online pharmacies always try new tactics to get around those protections and illegally sell drugs on the web.

In recent years, we have noticed a marked increase in the number of rogue pharmacies, as well an increasing sophistication in their methods. This has meant that despite our best efforts—from extensive verification procedures, to automated keyword blocking, to changing our ads policies—a small percentage of pharma ads from these rogue companies is still appearing on Google.

According to DOJ, the settlement from Google was one of the largest ever in the country.

“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,” said deputy attorney general James Cole.