Last week, the U.S. Department of Justice announced that Google was admitting their liability and would be paying a $500 million penalty for accepting illegal ads from Canadian pharmacies that were targeting their sales to U.S. consumers. By reaching a settlement with the DOJ, Google seems to have dodged an even messier bullet by avoiding the potential criminal prosecution of CEO Larry Page.
The DOJ non-prosecution agreement states that Google had been on notice since 2003 that a number of Canadian pharmacies were using AdWords to sell their drugs in the U.S. The U.S. Attorney in charge of the DOJ case, Peter Neronha, is now claiming that Page was fully aware of the Canadian ads and that he knew full well that they were illegal.
According to an article in the Wall Street Journal:
“‘Larry Page knew what was going on,’ Peter Neronha, the Rhode Island U.S. Attorney who led the probe, said in an interview. ‘We know it from the investigation. We simply know it from the documents we reviewed, witnesses that we interviewed, that Larry Page knew what was going on.’ …Mr. Neronha said he didn’t have any plans to prosecute Mr. Page or individual executives, although he said they weren’t off limits.”
The question remains whether this problem represents a breakdown in Google’s less-than-rigorous controls, or did Page and other executives intentionally violate the law? In the wake of the settlement, Google issued this statement:
“We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”