Google CEO Larry Page knew the company was allowing Canadian pharmacies to advertise their prescription drugs in the U.S. on the AdWords platform, said the DOJ.
(NASDAQ:GOOG) CEO Larry Page for years knew about the ads his company served on
behalf of Canadian online pharmacies illegally targeting U.S. consumers,
according to a U.S. attorney who led the probe against the search giant.
The company Aug. 24 agreed to pay an unprecedented $500 million
fine to the U.S. Justice Department
to settle the allegations. Shipping
prescription drugs to U.S. customers from outside the country is a violation of
the Federal Food, Drug and Cosmetic Act and perhaps even the Controlled
admitted doing this from 2003 to 2009, after which it banned the practice.
"It's obvious with hindsight that we shouldn't have allowed these ads on
Google in the first place," Google told eWEEK.
The company declined to comment further on the matter.
The DOJ said in statement the fine equals both the sales Google
made from the placement of those ads through its AdWords platform, as well as
the sales the pharmacies earned from U.S. customers.
Now the lead
investigator in this probe has come forward to say that it learned Page was
aware of the ads.
Page knew what was going on," Peter Neronha, the Rhode Island U.S. Attorney
who led the probe, told The Wall Street Journal
. "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."
said he would not prosecute the company further, helped pore over 4 million-plus
documents and discovered emails and other information that indicate Page knew
of the illegal ads.
that it was not a matter of a few rogue customer service workers enabling the
ads, but a corporate decision to allow them. This documentation will be sealed
as a result of the settlement between Google and the DOJ.
declined to comment on whether Page and other top executives knew of the
illicit ad sales, which Google sought to combat by filing a federal lawsuit to block individuals running illegitimate pharmacies from
advertising on its search engine
is something of a small powder keg for Google, which has worn its "Don't
Be Evil" mantle proudly for several years. Google watchers, journalists
and pundits suggest the credo is aimed at doing the right thing only for
has been unabashedly cutthroat toward the likes of Apple, Microsoft and smaller
rivals that play where Google wants to command business online. Now the
definition of "evil" may well find itself stretched to include
enabling businesses to use its search engine to profit by breaking U.S. laws.
The fact that
Page knew about this practice, which leveraged the search ad platform
responsible for some 97 percent of the company's sales, and looked the other
way, suggests a brazen arrogance in the face of the U.S. government.
is certainly something the Federal Trade Commission may pay close attention to
as it scrutinizes the company for antitrust issues
regarding its search ad business. In fact, the FTC may use it as an excuse to
investigate the company more aggressively going forward.