Google to Face Huge Fines for Illegal Pharmacy Ads?

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Recently, we have been reporting on research published in the respected scientific journal, Health Affairs, which found that Americans who have the most access to the Internet are much more likely to be addicted to prescription pills than their peers who have less access. The problem is compounded by the bewildering variety of drug sites offering prescription painkiller—often counterfeit or expired medications—without benefit of a valid doctor’s prescription.

Now comes a reminder that the biggest online pill pusher of all may turn out to be, that’s right—Google. The Wall Street Journal reported on Friday that Google and the U.S. government were close to settling a criminal investigation into Google’s practice of taking paid ads from online pharmacies that violate U.S. law.

In what the Wall Street Journal called a “cryptic regulatory filing,” Google, otherwise known as Page Number One on the Internet, has set aside a whopping $500 million as a reserve against a possible settlement with the Justice Department. Trying to pry details of the alleged settlement out of Google is like asking them for their page rank algorithm; in other words, a Google spokesperson declined comment.

Search engines are criminally liable if they profit from illegal activities, previous courts have found. And Google has been here before, along with Microsoft and Yahoo, when the three companies agreed to pay out $31 million in fines for accepting ads from illegal online gambling sites in 2007. The drug ads dilemma has been long and odd, as Google has struggled to formulate and reformulate policies that skirt the edge of grey-market drug profiteering.

In 2003, the Journal reports, the company banned advertising for U.S. companies offering Vicodin and Viagra without prescriptions. But the Justice Department has been attempting a furious crackdown on illegal online pharmacies in the wake of media reports linking Internet access to illegal drug use. The unspoken part of the proceedings--the thing that has investors truly nervous-- was well summarized in the New York Times on Friday by Eric Goldman, director of the High Tech Law Institute at Santa Clara University: "For investors, I think they just got a little bit of a jolt that maybe Google's profits are due to things they can't ultimately stand behind."


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