Google Pays DOJ $500 Million for AdWords Ordeal

Google has agreed to pay the Department of Justice (DOJ) $500 million for its role in allowing online Canadian pharmacies to place advertisements through its AdWords program.

By letting this happen, Google allowed for controlled and non-controlled prescription drugs to enter the United States illegally. The forfeiture of money is one of the largest sums paid by a company to the DOJ.

The DOJ, led by Deputy Attorney General James M. Cole, said the $500 million represents the approximate revenue the U.S. made as a result of Canadian pharmacies advertising through Google's AdWords program. It also included the revenue the Canadian companies made from their sales to U.S. consumers.

AdWords lets companies advertise on Google search results. It's a big source of revenue for the company, approximately $28 billion in 2010 according to its most recent financials.

The DOJ said the shipment of prescription drugs from pharmacies outside the United States violates the Federal Food, Drug and Cosmetic Act. This, the DOJ said, is something Google had been aware of as recent as 2003.

Even though Google took some steps block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they let pharmacies from the Great White North pass through. The DOJ continued to make Google aware that it was violating the law by allowing them to advertise. Not only that, Google was also reportedly providing customer support to some of these companies.

Finally in 2009, Google took steps to prevent the unlawful sale of prescription drugs by online pharmacies to U.S. consumers. It began pharmacies to be certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practices Sites program. Canadian pharmacies cannot get certified through this process.

The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers. This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history, said Deputy Attorney General Cole.

The whole investigation came after a fugitive from the law who fled to Mexico and started selling unlawful drugs through AdWords. Once he was caught, he began to cooperate with authorities and exposed the Adwords underworld.

Follow Gabriel Perna on Twitter at @GabrielSPerna