Google Knew About Illegal Ads For YEARS Before Trying To Stop Them

larry page shrug

[credit provider=”Dylan Love”]

Google just paid $500 million to settle an investigation with the Department of Justice because the company sold illegal ads to Canadian pharmacies who weren’t supposed to be selling in the U.S.Google made it sound like it was struggling against these advertisers for years—for instance, in 2010 the company wrote a blog post saying it was engaged in a “cat and mouse” game with them.

But in fact, Google knew what was going on for years and did nothing to stop it.

Google even offered customer support to the illegal advertisers, and it didn’t close various loopholes that allowed the ads to sneak in front of U.S. viewers until it became aware of the government investigation.

Those revelations come from Google’s non-prosecution agreement with the DoJ and Rhode Island (PDF here), which was highlighted by Ben Edelman on his blog a few minutes ago.

Google signed the document, so it legally agrees to all these statements (emphasis ours):

  • As early as 2003, the Company was aware that in most circumstances it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the United States from Canada.
  • The Company knew that U.S. consumers were making online purchases of prescription drugs from Canadian pharmacies….In an August 23, 2005 email, an employee in the company’s policy group stated “the majority of Canadian pharmacies are in business to drive pharmacy traffic from the United States to Canada” and “target the U.S. in their geo-targeting.”
  • From 2003 to 2009, the Company provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimising their AdWords advertisements and in improving the effectiveness of their Websites.
  • The company was on notice that certain online pharmacy advertisers set up their advertising programs so that their AdWords advertisements would not run in the United States….Once the advertisements began to run on the Company’s search engine, however, some pharmacies changed the geo-targeting of their advertisements so as to cause the advertisements to appear in the United States….Although the Company was on notice that some companies changed their geo-targeting in this manner, the company did not prevent these changes in geo-targeting until after it became aware of the Government’s investigation.

  • As early as July 2004, the company was on notice that online pharmacies were circumventing the Square Trade and PharamacyChecker [third-party companies that Google used to screen these ads] certification process by intentionally avoiding the use of certain pharmaceutical terms in the text of their AdWords advertisements, while using these same terms as advertising “keyword” terms….For example, in a February 13, 2008 email, a member of the Company’s policy group stated, “[t]he only ads that are getting blocked are those with explicit pharma terms in the ad texts; the shady, fraudulent advertisers know not to do this.” After it became aware of the Government’s investigation, the company made changes to its system in order to flag for review all ads that had prescription drug terms as keywords.

In other words, Google began taking serious steps against these advertisers only after the government started investigating in 2009.

Google has forfeited the money from these ads, which is estimated at $500 million.

But it’s a pretty shocking admission from a company that once promised never to place short-term profit over the long-term interests of its customers and users.

It also gives reason to wonder about Google’s diligence in other areas.