Wednesday, August 24, 2011

Google Reaches $500 Million Settlement With Government

12:48 p.m. | Updated to include official announcement.
The Justice Department announced Wednesday that Google will pay $500 million to settle government charges that it has shown illegal ads for online Canadian pharmacies in the United States.

The investigation was first revealed in May, when Google said in a government filing that it set aside $500 million for the potential settlement of a Department of Justice investigation into its advertising practices. The move decreased its quarterly profit by 22 percent.

At the time, government technology/13google.html">officials said the investigation concerned ads from online pharmacies that operate illegally by failing to require a prescription or selling counterfeit drugs. Google has said in the past that regulating these pharmacies on its site is a cat-and-mouse game, because when it introduces rules to prevent them from advertising, they find technology/14google.html">new ways to appear on Google.

Web sites are liable for ads on their sites from advertisers that break federal criminal law.

Google said, in a statement Wednesday, “We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

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