Google Agrees to Forfeit $500 Million As Part of Non-Prosecution Agreement

Sep 14, 2011   

On August 19, 2011, Google entered into a non-prosecution agreement with the United States Department of Justice to settle allegations that the search engine knowingly and improperly assisted Canadian online pharmacies in advertising prescription drugs and controlled substances that targeted the United States in violation of  21 U.S.C. § 952 and 21 U.S.C. § 331 though its AdWords advertising program. As part of the non-prosecution agreement, Google agreed to forfeit $500 million to the United States government. A copy of the non-prosecution agreement can be read here.

Generally speaking, the Food, Drug, and Cosmetic Act (“FDCA”) prohibits pharmacies located outside the United States from selling and shipping prescription drugs to consumers in the U.S. See 21 U.S.C. § 331(a) and (d). One of the more popular ways for international pharmacies to engage in business with U.S. consumers is via the internet. Federal prosecutors alleged that since 2003 Google has been aware of the illegality of prescription drug sales by online Canadian pharmacies advertising on its AdWords program. (AdWords is an online advertisement program run by Google which allows advertisers to post ads, for a fee, that specifically target selected regions or countries for business.) The non-prosecution agreement also alleges that Google knew that many of these online pharmacies distributed prescription drugs and controlled substances through their websites without valid prescriptions from a doctor. Additionally, federal prosecutors allege that between 2003 and 2009, Google provided customer support to these online pharmacy advertisers to optimize their ads and improve the effectiveness of their websites.

As a result of these allegations, Google agreed to forfeit $500 million to the federal government. The $500 million total includes both the revenues earned by Google from the advertisements as well as the estimated revenues the online Canadian pharmacies received through the sale of drugs to American customers. Google has also agreed to enhance its compliance program for online ads. Upon learning of the governments investigation, Google made several changes to its advertising policies regarding online pharmacies. Google has since required all online pharmacies to be certified by either the National Association Boards of Pharmacy in the US or the Canadian International Pharmacy Association. Additionally, Google now prohibits foreign online pharmacies from advertising in the United States on AdWords. Google has also brought suit against several pharmaceutical advertisers for violating its advertising rules.

The governments non-prosecution agreement with Google may signal a new approach at combating illegal drug trafficking. In this case, though Google was not involved in the actual sale, distribution, or transfer of drugs from foreign pharmacies to the United States, the Department of Justice has treated Google as an aider and abettor of these pharmacies, and thus liable for the unlawful conduct of the pharmacies. However, it should also be noted that because this is a non-prosecution agreement and not a plea bargain, no judicial approval is needed for its terms. Therefore, it is conceivable that had Google not agreed to enter into this agreement, federal prosecutors may not have been able to obtain an indictment and conviction.

Lawyers at Fuerst Ittleman are experienced in representing individuals and corporations facing scrutiny from the government regarding regulatory and white collar criminal allegations. For more information regarding Fuerst Ittlemans white collar criminal defense practice, contact an attorney today at contact@fidjlaw.com.