Google settles illegal pharmacy ads case with $500m forfeit

Google has forfeited $500m in revenues generated from allowing illegal online pharmacies to place paid advertisements alongside its search results, which resulted in "the unlawful importation of controlled and non-controlled prescription drugs into the USA."

The case relates to the notorious Canadian Pharmacy brand websites, which offered medicines for sale to US consumers, often via spam emails, with the promise of low prices and without a doctor's prescription. All too often the medicines would be substandard or completely fake, placing consumers at risk of injury.

The size of the forfeiture - one of the largest in US history - gives a strong indication of the size of the rogue pharmacy market.

A US Department of Justice statement notes that the forfeiture "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 US consumers."

Thankfully, the successful takedown of the Rusteck botnet last year deprived the Canadian Pharmacy operators of a major marketing tool and reduced the volume of spam emails offering medicines markedly. However, it has been suggested that the illegal drug sellers have moved on to other channels, such as Twitter, to draw consumers to their e-commerce sites.

The DoJ says that Google was aware as early as 2003 that it was generally illegal for pharmacies to ship controlled and non-controlled prescription drugs into the USA from Canada, because they may not meet FDA labelling requirements, may not have been made, stored or shipped in appropriate conditions, and could have been supplied without a valid prescription.

Although Google took steps to block pharmacies in countries other than Canada from advertising in the USA through AdWords, they continued to allow Canadian pharmacy advertisers to target US consumers. It was not until 2009, when Google was already aware of an investigation by the Rhode Island US Attorney's Office and the FDA's Office of Criminal Investigation, that the company started requiring all pharmacy advertisers to be certified by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practices Sites (VIPPS) programme.

During the course of their investigation federal authorities set up a number of undercover websites for the purpose of advertising the unlawful sale of medicines via AdWords.

Meanwhile, the DoJ intimated that other online platforms could also see this type of forfeiture, saying it will "not only get Google’s attention, but the attention of all those who contribute to America's pill problem." Other search engine providers such as Microsoft/Bing and Yahoo have been criticised in the past for not doing enough to block the actions of rogue pharmacies.
 
Last September Google filed its own civil lawsuits against a number of online pharmacy operators which - it alleges - deliberately broke its advertising rules (see Google sues online pharmacies peddling fake drugs).