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.
This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!
Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.
The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.
Wednesday, July 23, 2014