R.I., U.S. To Split $500M Google Settlement Over Online Pharmacy Ads

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Rhode Island will receive about $230 million of a $500 million settlement that Google agreed to pay last year over allegations that the company allowed illegal online pharmacies to display Web advertisements in the U.S., the Boston Globe reports.

The rest of the settlement funds will go to federal agencies involved in the investigation against Google (Denison, Boston Globe, 4/3).

Background

In August 2011, the Department of Justice announced that Google had agreed to pay $500 million to settle allegations that it allowed Canadian-based "rogue pharmacies" -- which offer counterfeit medications or do not require valid prescriptions -- to run ads through AdWords, Google's self-service program that allows users to post ads next to relevant search results. Companies are liable for ads on their websites that violate federal law.

The settlement covered revenue that Google received from the illegal advertisers, as well as revenue that the Canadian pharmacies received from U.S. consumers. As part of the agreement, Google did not face criminal charges (iHealthBeat, 1/26).

Details of the Settlement

Rhode Island's $230 million in settlement funds will go to local and state law enforcement agencies that helped investigate Google's role in placing the online ads for illegal pharmacies.

Another $170 million will go to DOJ's Assets Forfeiture Fund. The remaining settlement funds include:

  • $40 million for the U.S. Postal Service;
  • $35 million for the Internal Revenue Service;
  • $15 million for the U.S. Secret Service; and
  • $10 million for U.S. Immigration and Customs Enforcement.

Google's Response

Google in a statement said, "We take responsibility for our actions. With hindsight, we shouldn't have allowed these ads on Google in the first place" (Crimaldi, AP/USA Today, 4/2).


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