Report: Google to Settle With DOJ Over Illegal Pharma Ads

  |  May 13, 2011   |  Comments

Company has set aside $500 million for a possible DOJ settlement.

Google has set aside $500 million in anticipation of a settlement with the Department of Justice, the company revealed in its quarterly report to the Securities and Exchange Commission, filed Tuesday. According to a report by the Wall Street Journal, that settlement relates to Google's knowing acceptance of ads from online pharmacies that violate U.S. laws.

"In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500 million for the three month period ended March 31, 2011," the SEC filing stated, adding, "Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business."

Google declined to comment on the matter today, as did the Food and Drug Administration, which is reportedly working alongside the DOJ to investigate the company's practices. The DOJ had not returned requests for further information at the time of publish.

In 2003 Google said it would stop accepting ads from unlicensed pharmacies, and in 2007 the company, along with Microsoft and Yahoo, agreed to pay a combined $31.5 million fine in relation to the sale of ads for illegal gambling sites.

In September, Google attempted to deter the placement of illegal ads on its platform by filing a civil lawsuit in federal court against advertisers it believed deliberately broke its rules. In a blog post published at the time Michael Zwibelman, the company's Litigation Counsel, wrote, "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… 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 the WSJ report, however, the DOJ is currently trying to establish whether or not Google executives were in fact aware of the illegal ads it was selling, and turned a blind eye to that activity.

Tags:

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Jack Marshall

Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011. 

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Search newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

WEBINARS

Jobs

    • Web Writer
      Web Writer (Money Map Press) - BaltimoreDo you have a passion for the markets and investing, and writing? Do you want to spend your days providing...
    • Web Production Specialist
      Web Production Specialist (Money Map Press) - BaltimoreMoney Map Press is looking for a self-starter to perform and oversee the production of daily...
    • Internet Marketing Campaign Manager
      Internet Marketing Campaign Manager (Straight North, LLC) - Downers GroveWe are looking for a talented Internet Marketing Campaign Manager...