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Google Reaches $500 Million Settlement With Feds 172

Posted by samzenpus
from the my-coumadin-tastes-funny dept.
bonch writes "As expected, Google will pay the government $500 million to settle a criminal probe into whether or not they profited from the display of ads from illegal online pharmacies. Google had vaguely referenced its settlement plans in a quarterly filing last May after charges that ads from rogue pharmacies were still appearing on Google despite a change in advertising policy. Drug advertising generates lucrative profits of about $1 billion, leading critics to charge that companies like Google aren't vigilant enough in policing their advertisers."
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Google Reaches $500 Million Settlement With Feds

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  • How does google know that they are illegal?

    What makes one online pharmacy legal or illegal (maybe non-trivial for them to tell, since they aren't authorities), or are they all illegal (should be easy to check, makes them lazy/irresponsible for not checking)

    • Re: (Score:2, Informative)

      by bonch (38532) *

      Google claimed to only accept ads from pharmacies verified with PharmacyChecker.com, but ads from unverified pharmacies continued to appear [nytimes.com].

      • Well I can certainly see why they would settle, then. If you agree with the government to vet advertisers, you'd better do what you promise.

        It's unfortunate that you didn't include that information in the summary.

        • by jhoegl (638955)
          Is this a surprise? Ads are one way for malware/viruses to get installed. Vulnerabilities and redirections built into the ad suppliers ad make it the fastest way to get distributed.

          Google may have been busted, but they arent the worst.
        • by bonch (38532) *

          This isn't a new story, so I didn't include all the details behind the investigation. That information is contained in the linked articles.

          Also keep in mind that, though it didn't happen in this case, editors often make changes to a submission, and then commenters blame the submitter for inaccurate or incomplete information.

      • Google are shills, just like everyone else on line in the .COM domain.
    • by MacGyver2210 (1053110) on Wednesday August 24, 2011 @01:58PM (#37193814)

      Isn't it sort of the government's responsibility to crack down on illegal activity, and not the search engines'? Is Google now the police? Should they be expected to recognize every crime online and somehow thwart it? If they index a security camera, which happens to record a crime, and Google could have reasonably logged in and watched it happen, should they be accountable for not stopping it?

      For fuck's sake...

      Sometimes I think Google would do a better job running this country than the fucktards we elect. Do your fucking job for once, government.

      • Re: (Score:3, Interesting)

        by ge7 (2194648)
        It's not about Google indexing them, it's about Google advertising them (to clarify, within the advertised results). You aren't really allowed to carry illegal advertisements in newspapers either.
        • by TheCarp (96830) <sjc@@@carpanet...net> on Wednesday August 24, 2011 @02:35PM (#37194314) Homepage

          However, operating a pharmacy and advertising it are not illegal. I could see that argument if the ad was "Come buy cocaine to help soothe your toothe ache". However, its not.... if I put up an ad saying "Apartment for rent" but... the apartment is an illegal basement or has no fire escape.... would they be liable for advertising something illegal?

          Why is the onus on an IT company to perform the job of a licensing board? They are not even in the healthcare industry! What part of their business, which is very very broad, is supposed to make them experts in the legalities of every industry that they interact with?

          I think this is a ridiculously high standard.

          • by bws111 (1216812)

            Google is not an IT company, they are an advertising company. If you are an advertising company, it is your responsibility to know and obey the laws regarding advertising.

            • by bhagwad (1426855)

              Google is not an IT company

              This is the funniest comment I've read today :D

              • by bws111 (1216812)

                Oh yeah? Well, according to their own annual report:

                We generate revenue primarily by delivering relevant, cost-effective online advertising. Businesses use our AdWords program to promote their products and services with targeted advertising. In addition, the third parties that comprise the Google Network use our AdSense program to deliver relevant ads that generate revenue and enhance the user experience.

                And in the financial details, they reveal that in 2010 they had $28.2B revenue from advertising, and $1B revenue from all other sources. You would think that an 'IT' company would have most of it's income from IT things, wouldn't you? Saying Google is an IT company is like saying Ford is a 'metal and plastic shaping' company.

              • by bonch (38532) *

                It's correct in terms of Google's business model. They make the majority of their money from online advertising. Their use of online technology is simply the means.

                • by bhagwad (1426855)
                  So then they should also be selling billboard space?
                  • by bonch (38532) *

                    I wrote that the web is their means of advertising, so I'm not sure why you're asking me if they should be selling physical billboard space. Sure, I guess they could do that if they thought it would be profitable and they could find a way to make it context-sensitive. It's not like they never expand beyond the web; look at their driverless car. However, they built their advertising model on web technology, and if you look at their financials, that's where the vast majority of their revenue is coming from.

                    Th

          • by Americano (920576)

            What you are suggesting is that Google - an *advertising* company, who makes 95+% of its revenues and profits from advertising - should be exempted from knowing the rules and regulations of the industries in which they operate because "they have computers."

            I work in IT for a financial company - all of our revenues & profits are from financial services - funds, trading, planning, etc, but anybody who knows anything about the financial services industry knows that it's a very broad and diverse industry, a

      • by bws111 (1216812)

        Did you hurt yourself with all that twisting? Google did not 'happen to index' illegal pharmacies, they sold ads for them, directly profiting off an illegal activity. And yes, it is the governments responsibility to crack down on illegal activity (such as selling ads for unlicensed pharmacies), which they did quite successfully by suing Google (the perpetrators of said illegal activity).

      • by geekoid (135745)

        RTFA and you would not look so foolish. to sun up:

        Google was warned about fake ads.
        Google was supposed to use pharmacychecker to determine iof they where legit.
        Ads for phamacy not verified by pharmacychecker continues to appeers.

        to sum up the sum up:
        they were told they were to stop, and didn't.

        The government is doing it's job, and it did it reasonably.

  • Question (Score:4, Insightful)

    by Anonymous Coward on Wednesday August 24, 2011 @01:40PM (#37193546)
    So Google makes a billion dollars in profit doing something they later get fined half a billion dollars for. What exactly is the incentive to not do something like this again in the future? Seems like paying a fine is a cost of doing business that is well worth it in these cases!
    • by rnaiguy (1304181)
      from TFA:

      "Drug and health care advertising generated about $1 billion in Internet spending last year and is expected to grow to nearly $1.9 billion by 2015, according to the research firm eMarketer Inc."

      That's $1 billion total spending, not profit, and not only Google. I don't think Google generated anywhere near $500 million from it.

      • by bws111 (1216812)

        Furthermore, that is $1B spent in all health care advertising, not just illegal healthcare advertising. I imagine that the illegal spending is a small fraction of that.

  • So, did Google write a check or just put it on their Amex?

    • by Smallpond (221300)

      They paid in V14gra

      • Uhhhh - what good would Viagra do government? I can't tell that anyone in Washington actually has any balls, so they are likely lacking the other parts of the male reproductive tool . . .

    • by pla (258480)
      So, did Google write a check or just put it on their Amex?

      I don't know, but for some unknown reason they decided to pay $618,033,989 instead of an even $500M.
  • by pla (258480) on Wednesday August 24, 2011 @01:45PM (#37193610) Journal
    First of all, TFA makes it sound like a straightforward case of "don't advertise illegal crap". Google didn't outright take ads for vendors of illegal drugs, they took ads for entirely legal Canadian pharmacies. The FDA just doesn't like anyone cutting in on US pharmaceutical industry profits (even when the drugs come from those very same US companies).

    Second, if merely accepting ads from unkosher sources commits a crime, then why the hell haven't the major broadcast networks gotten the smack-down for showing a non-stop string of crapvertisements from the likes of such blatant frauds as Enzyte and Head On?

    Oh. Right. "Online", the magic word that makes everything old new and illegal again.
    • by Desler (1608317)

      Google didn't outright take ads for vendors of illegal drugs, they took ads for entirely legal Canadian pharmacies.

      Wrong, they were taking ads from unlicensed Canadian pharmacies as well which is why once the investigation found this out that Google put in a requirement that all Canadian pharmacies had to be certified by the Canadian International Pharmacy Association.

      The FDA just doesn't like anyone cutting in on US pharmaceutical industry profits (even when the drugs come from those very same US companies).

      You might have a case for this if not for the fact that Google was already blocking Canadian pharmacies from US users some time before the investigation even happened. No, what they were not happy with was the fact that many of these unlicensed pharmacies

      • "No, what they were not happy with was the fact that many of these unlicensed pharmacies were claiming to sell brand-name drugs but in fact were selling counterfeits. Which is *gasp* fraud and is illegal."

        By "counterfeits" do you mean "generics" or truly not the advertised chemical compound? I would not consider counterfeit and generic interchangeable, and one situation is far more concerning than the other.

    • Head-On works...if the desired result is a fleeting cool sensation on your forehead. Enzyte does nothing. Nor does Stacker, nor does Worx, or any of those get-rich-quick drug attempts.

    • by lexsird (1208192)

      Well do we really have to ask? Hasn't the Federal Gov of the United States proven time after time to be extortionists acting as lackeys for corporations? Heaven forbid we get medicine from some place other than the Health Nazis of America. Sweet Jesus, someone save us from these fuckers.

      • by Coren22 (1625475)

        Counterfeit drugs is actually a huge problem. Some of these companies outright fake the drug, which can be deadly. But even more, some of the companies actually even use poison in the formulas.

    • by eldavojohn (898314) * <eldavojohnNO@SPAMgmail.com> on Wednesday August 24, 2011 @02:12PM (#37194024) Journal

      First of all, TFA makes it sound like a straightforward case of "don't advertise illegal crap". Google didn't outright take ads for vendors of illegal drugs, they took ads for entirely legal Canadian pharmacies.

      Er, citation needed. There's a bit of a history here indicating that Google was taking ads from just about anybody [wsj.com] ... People have been selling prescription medicine on the internet forever [washingtonpost.com]. How real it is or where it comes from, what does it matter? The fact is that you need a prescription for it for a reason and those people get it without one.

      The FDA just doesn't like anyone cutting in on US pharmaceutical industry profits (even when the drugs come from those very same US companies).

      That or they are attempting to do their job to regulate medicine.

      Second, if merely accepting ads from unkosher sources commits a crime, then why the hell haven't the major broadcast networks gotten the smack-down for showing a non-stop string of crapvertisements from the likes of such blatant frauds as Enzyte and Head On?

      Because Head On and Enzyte don't contain prescription drugs? They're largely over the counter drugs? It's when you get into scheduled drugs that the federal government gets upset. Here's an example of Adderall and Vicodin [nbcnewyork.com].

      Oh. Right. "Online", the magic word that makes everything old new and illegal again.

      No, but it makes it easier for you to appear legitimate, make quick semi-anonymous transactions of money and do it across a border so it's harder for law enforcement to track. "Online" increases our ability to communicate, it increases our commerce and it greatly improves our quality of life but it also amplifies the potential of illicit and illegal activities (for the same reasons I just listed). It's a double edged sword.

      Google set aside $500 million for this a while ago. I'm not saying that that act alone implies guilt but it certainly indicates that they were preparing for this. If they thought these claims were bogus, I bet they would have put that money to better use. They have a history, I see news articles about these illegal prescription-less pharmacies and I'm guessing that you're just blindly defending Google for god only knows why.

    • by Baloroth (2370816)

      The difference is that "drugs" like Enzyte don't break federal criminal laws, mainly because they are "natural herbal supplements" (not drugs) whose claims "haven't been endorsed or evaluated by the FDA." Some of the companies advertising over Google (apparently) did, probably by claiming that they were FDA approved or whatever, or more likely, the equivalent of an approved drug (which they aren't). The first may be deceptive, but isn't criminal. The second is, unfortunately for Google.

      The difference may l

      • The difference may looks subtle, but consider that herbal supplements like Enzyte aren't likely to kill you, although they won't work.

        Oh [prlog.org] really [newschannel5.com]? (google it for many more articles) Many drugs come from plants - if the drugs work so do the herbal versions but with far more risk to the idiot taking them! When using a plant extract the concentration of active ingredient is not well controlled and there are other, potentially harmful, chemicals in the plant. Compare that to drugs which are carefully synthesised under laboratory conditions so that you have a precise dose and there are no other harmful substances included.

        The only good thing

    • by jamrock (863246) on Wednesday August 24, 2011 @02:50PM (#37194526)

      First of all, TFA makes it sound like a straightforward case of "don't advertise illegal crap". Google didn't outright take ads for vendors of illegal drugs, they took ads for entirely legal Canadian pharmacies. The FDA just doesn't like anyone cutting in on US pharmaceutical industry profits (even when the drugs come from those very same US companies).

      I suggest that you go to the source. Here's the release from the Department of Justice [justice.gov] outlining the settlement, and here's the relevant passage:

      The importation of prescription drugs to consumers in the United States is almost always unlawful because the FDA cannot ensure the safety and effectiveness of foreign prescription drugs that are not FDA-approved because the drugs may not meet FDA’s labeling requirements; may not have been manufactured, stored and distributed under proper conditions; and may not have been dispensed in accordance with a valid prescription. While Canada has its own regulatory rules for prescription drugs, Canadian pharmacies that ship prescription drugs to U.S. residents are not subject to Canadian regulatory authority, and many sell drugs obtained from countries other than Canada which lack adequate pharmacy regulations. ... “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. [Emphasis mine]

      It's not a matter of "advertising illegal crap", as you put it, and the fact that the Canadian pharmacies are "entirely legal" is irrelevant. As the statement in the DOJ release makes clear, these pharmacies aren't subject to the Canadian food and drug regulations, and are basically allowed to sell drugs to Americans from any source they see fit, however questionable. The FDA is in fact fulfilling it's basic mandate in this case, namely protecting the American public from drugs and medication whose standards they cannot ensure.

      And for the consumption of idiots who think that Google is somehow the victim, here's another passage from the statement:

      An investigation by the U.S. 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. Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian pharmacy advertisers to target consumers in the United States . 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. Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites.

      Google blocked foreign online pharmacies after being notified by the FDA in 2003 — except those from Canada. The statement also makes clear that customers were willing to pay online pharmacies a premium if they didn't have a valid prescription,

      • From the DOJ:

        "Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites."

        "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

      • Helping people access cheap medication seems very non-evil. Don't think there were many reports of people being harmed. The FDA is 90% about controlling the market for profit and 10% about safety.
        • by bonch (38532) *

          I can make up percentages too. I deduce that your post is 62% ignorance, 30% paranoid, and 8% just plain dumb.

        • Helping people access cheap medication seems very non-evil. Don't think there were many reports of people being harmed. The FDA is 90% about controlling the market for profit and 10% about safety.

          Helping people access cheap medication wIthout prescriptions, and which they know may cause harm, by deliberately ignoring the ramifications and enabling the suppliers solely because it's profitable, seems very non-evil to you?

          You're not an idiot; you're a fucking idiot.

          • A lot more harm is done and a lot more money is made by denying access to medication. Your mommy may have spanked you for eating a cookie without permission, but it's time to grow up.
            • by bws111 (1216812)

              IF the person knows what medicine they need, and IF they know the correct dosage, and IF they fully understand the interactions that may occur with other medications, and IF they get the medicine they ordered, and IF the received dosage is correct, and IF the medicine is not tainted, then you MAY have a point. The odds of all that occurring with someone who is not an MD and who is ordering from an unlicensed, unregulated, illegal pharmacy is extremely small. For everyone else, there is a very real possibi

      • by bonch (38532) *

        Unfortunately, your post will be ignored while pla's will remain at +5 Insightful, because moderators apparently love "big pharma" conspiracy theories.

    • by trawg (308495)

      What I find more amazing is the average drug-related content that you guys have on commercial television. When I'm visiting the US I often watch a bunch of television with my (American) relatives, and I have sat through entire commercial breaks that have been nothing but pharma ads.

      And we're not talking headache pills here - these are things where the actual symptom list include things like "anal leakage" and "death". They were funny at first but after a while I found them really depressing.

  • It's more common than you think. Ask your doctor to be sure.
  • by halfEvilTech (1171369) on Wednesday August 24, 2011 @01:47PM (#37193662)

    This more has to do with the re-importation of the very same drugs that the Big Pharma companies want to sell to us at extremely high markups. This is not about safety it is about protecting profits for those companies. Anyone who thinks otherwise is delusional.

    • by bonch (38532) *

      You're delusional. From the DOJ:

      An investigation by the U.S. 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. Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian phar

    • Re:Big Pharma (Score:4, Insightful)

      by witherstaff (713820) on Wednesday August 24, 2011 @05:53PM (#37197326) Homepage
      I couldn't agree more. When the Gov stopped the senior citizen bus trips to Canada for pharmacy refills that saved them bundles you know it was all about the almighty dollar of Big Pharma. In almost every other industry the Internet has saved people money by finding the best reseller, except those with strong gov't lobbying efforts.
  • Sounds like Google has the "if I don't get caught have I done anything wrong" attitude and now are getting called out on it, makes me wonder just how many other instances of "see no evil, do no evil" the public and competitors don't know about.
  • From one of TFAs: "Web sites are liable for ads on their sites from advertisers that break federal criminal law."

    Um, just how is one supposed to know - guarantee - that an advertiser is not breaking the law? This potentially affects anyone accepting advertising, all the way from Google down to the lowliest blog. It essentially requires the site accepting advertising to be legally expert in every possible realm of business. What is legal for pharmacies to do? How about alcohol sales? How about car rentals? H

  • get in trouble for what the company in the ad is doing?

    • little things like if you are a taxi driver and were found out to provide services for a Serial Killer you are on the hook for all of his victims (just like you were the "wheelman" for a gang of thieves).

      Depending on how miffed the authorities are when they catch somebody a lot of folks can be on the hook for crimes even though what they actually did is strictly Legal.

      So yes i can see Google being on the hook for illegal pharmacy sites since they basically got a "cut" of the pharmacies take.

    • by bonch (38532) *

      Because advertising and therefore profiting from an illegal activity is being complicit in the activity.

    • by Americano (920576)

      I know, right? And for that matter, why does the getaway driver get in trouble for what the bank robber did? Why does the accountant who helped the CEO falsify financial and audit information get thrown in prison?

      If you aid in the commission of a crime... you are liable for being an accomplice, or an accessory, or for aiding and abetting... there are numerous legal precedents for this, and this is nothing new. In this case, Google was helping pharmacies of dubious legality sell drugs of dubious quality a

    • by Hatta (162192)

      So the government can levy fines on more lucrative marks.

  • Another health related issue being treated as if it were criminal.

  • I would think that the Feds would want the criminals to advertise on Google. A criminal enterprise that advertises itself is much easier to catch than a more shadowy one that advertises through spam.
  • Tomorrow there will be a press release from the prosecutor. Some previous stories indicate that the drug ad business went beyond accidentally running such ads.

  • Google is many things. Google is awesome in it's interesting and fun methods and people. Google is a terrific contributor to the internet, technologies, F/OSS, and lots, lots more. Google is a huge game changer and a threat to many which the Slashdot crowd dislike and in many respects, a hero.

    But Google is a marketing/advertisement company. They should always be regarded as such despite the fact that they are also many great things.

    Let's just say that Google was caught "not being careful enough" which w

    • by Americano (920576)

      And all those financial companies were just caught "not being careful enough" with their investments and debt levels recently, too, which was technically their responsibility.

      So why the double standard? We scream for blood from the CEOs of the banks & financial services firms, and give Google a "aw shucks, kid, we still love you... but try harder next time, okay?"

      Google is kind of like that obnoxious friend or family member who does Amway or some other bullshit "MLM" scam, giving away some of their "aw

  • by Dan667 (564390) on Wednesday August 24, 2011 @04:21PM (#37195980)
    people who are not doctors have no idea if they need a drug or not so they should not be allowed to be advertised. People going into a doctor's office and asking for a drug by name that they don't need is driving up health care costs.
  • by peter303 (12292) on Wednesday August 24, 2011 @05:46PM (#37197246)
    Telephone companies are legally immune to crimes planned while using their equipment. For most of their history its too difficult to police transmissions. Is an ISP or Google a carrier, content provider or both?

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