Report: Google May Face $500m Fine Over Rogue Pharma Ads

The Wall Street Journal is reporting that search giant Google is close to reaching a settlement with the U.S. Justice Department over an investigation of the company’s policy of running ads from online pharmacies that operate outside U.S. borders and in violation of U.S. law.

Google fineThe Wall Street Journal is reporting that search giant Google is close to reaching a settlement with the U.S. Justice Department over an investigation of the company’s policy of running ads from online pharmacies that operate outside U.S. borders and in violation of U.S. law.

Google has not made a public statement regarding a settlement of the suit. However, the company did include a one time $500m payment in its recent quarterly income filing (10-Q) to the Securities and Exchange Commission (SEC). The payment, listed under “expenses” was for a “charge related to potential resolution of Department of Justice investigation.”

Published reports claim the investigation is being handled by the U.S. Attorney for the District of Rhode Island. A spokesman for the U.S. Attorney’s office there said he could not confirm or deny the existence of an investigation.

Google ads related to pharmaceuticals have been a major revenue source for the search firm in recent years. However, online advertising of pharmaceuticals has also caught the eye of cybercriminal groups, which use black hat techniques to drive traffic to illegal online pharmacies. They’ve also caught the eye of Federal regulators. In 2009, the U.S. Food and Drug Administration warned drug companies that their online advertisements at Google and on other search engines lacked the proper disclosures. In February, 2010, Google changed its policy for AdWords to only accept ads from pharmaceis certified by the National Association Baords of Pharmacy in the U.S. and the Canadian International Pharmacy Asscoication.

The $500 million fine, if agreed to by the DOJ, would be among the largest ever levied against a private firm. In 2009, U.S. pharmaceutical company Eli Lilly and Company agreed to pay a $515 million fine to settle a suit brought by the DOJ over the company’s efforts to promote so-called “off label” uses of its drug Zyprexa.

The Wall Street Journal has more details of the case here.

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