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Google is facing a $500 million dollar fine “in connection with a potential resolution of an investigation by the U.S. Department of Justice into the use of Google advertising by certain advertisers,” they disclosed in their 10-Q last week. This extraordinary potential fine comes at a time when Google has joined other companies and the White House in forming a non-profit designed to fight the prevalence of illegal online pharmacies, the very entities Google has illegally been selling ad space to. The allegations estimate that Google made hundreds of millions of dollars accepting illegal online pharmacy ads.
The majority of Google’s profit comes from selling AdWords advertisements – gleaning, on average, 71 percent of advertisers’ revenue for AdWords. But illegal online pharmacies are not the only shady ads Google is selling; selling AdWords advertisements that link a user to an illegal site is what got Google into hot water. One reporter estimates that Google is involved in selling several other types of illegal ads: ads for sites that charge consumers for things that are actually free, like Skype; advertisements for websites that purport to provide a “free” service but actually charge a monthly fee; advertisements for audio and video downloading that violate copyrights; ads for sites selling counterfeit software and adware bundled software; and ads for sites making deceptive mortgage modification claims.
Despite these other potential illegal advertising practices, so far Google has only been called to answer for its participation in advertising for illegal online pharmacies – pharmacies that sell medication without prescriptions, or sell counterfeit or expired medication. Though Google has a watchdog team to ferret out illegal pharmacies trying to advertise, and updated AdWords policy in February of 2010, at least some pharmacies have slipped through – enough to yield hundreds of millions of revenue dollars for Google. And seemingly, it is just the beginning.
- Susan Reilly
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