August 30, 2011
Google In Regulatory Hot Water
Google agreed late last week to a $500 million settlement, the amount made in illegal advertising, in a US Justice Department probe focusing on Canadian pharmacies advertising to American customers through Google´s AdSense program. The Canadian pharmacies had been selling prescription drugs without a doctor´s order to customers in the US, a violation of federal law.
According to Forbes, government investigators sorted through more than four million documents and found emails that they say show Page, Google´s CEO, was aware of the ad sales but didn´t stop them. It is against the law for websites to knowingly accept ads for companies or services that are illegal.
US Attorney Peter Neronha, who led the investigation, said to the Wall Street Journal, “We simply know it from the documents reviewed, witnesses that we interviewed, that Larry Page knew what was going on.”
The Justice Department says Google knew it was breaking the law since 2003, but did not take action until 2009 when the federal government started investigating, according to Forbes. Although Google told Congress it tried to stop illegal advertisements, Neronha said those efforts were nothing more than “window dressing.”
“Suffice it to say, that this is not two or three rogue employees at the customer service level doing this on their own. This was a corporate decision to engage in this conduct,” said Neronha to the Wall Street Journal.
A company spokesman told Forbes, “This issue is not related to current advertising practices. We have settled and we are moving on...It´s obvious with hindsight that we shouldn´t have allowed these ads on Google in the first place.”
According to Forbes, Millennial Media reports that Google´s AdSense program accounts for nearly half of all mobile advertising, a number that will likely continue to grow as more people use mobile devices like smartphones and tablets.
Google´s legal issues in its advertising practices may not be over. Google is still under investigation by the federal government concerning antitrust practices, initiated by the Justice Department after competitors complained Google skewed search results to favor its advertisers. They have yet to settle this case.
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