Google has apparently reached a settlement with the US government that will result in a payment of $500 million, all for permitting Canadian pharmacies to target US consumers via the AdWords program.
The US justice department made the announcement today that Google has settled on the $500 million payment. That amount comprises revenue made by Google from the pharmacies as well as dollars made from illegal sales to US customers.
The issue here is that it is illegal for controlled (and uncontrolled) drugs to be shipped from Canada to the United States. Back in 2003 Google acknowledged the existence of this law and yet ads still appeared from Canadian pharmacies via AdWords.
Most transactions of this type violate the Food, Drug and Cosmetics Act due to the fact that the drugs are not FDA approved. The other issue is that the pharmacies in question seem to also be able to avoid Canadian regulations, making them able to sell drugs from other countries to US buyers.
Google is eating the $500 million cost of this because not only did they allow the ads to be placed, but they provided service to the Canadian pharmacies to help with effective AdWords ad placement. It's not particularly surprising that Google settled on this with the Government, as they had no justification for assisting with these illegal activities.
Hopefully Google will learn from this particular AdWords mistake so as not to incur another huge fine for doing something similar in the future.
