Google's $500 million settlement with the Department of Justice over illegal ads for Canadian prescription drugs has resulted in a lawsuit from one of its shareholders.
A Pennsylvania woman who owns Google shares claims in her suit that Google was either aware or should've been aware that its AdWords program was serving up ads for online pharmacies in Canada, according to Bloomberg. A copy of the suit, filed in California district court, has not yet been posted online, but Google is reportedly accused of breaching its fiduciary duty.
Last week, the DOJ announced that Google will pay $500 million in fines over AdWords sales that allowed U.S. residents to access ads for online Canadian pharmacies. Those ads led to sites selling prescription drugs from Canadian pharmacies, which were then illegally imported into the United States. The $500 million forfeiture, which the DOJ said is the largest ever in the U.S., is the gross revenue that Google received from Canadian pharmacy-related AdWords sales plus the gross revenue earned by Canadian pharmacies that sold drugs to U.S. consumers, the agency said.
Importing prescription drugs into the U.S. from Canada and elsewhere is illegal because the Food and Drug Administration (FDA) cannot ensure their safety.
"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," Google said last week.
Justice officials said Google "was on notice" as early as 2003 about the Canadian pharmacy sales. While the search giant took steps to ban other countries from selling drugs in the U.S., DOJ said Google "continued to allow Canadian pharmacy advertisers to target consumers in the United States," providing customer support to some of these companies from 2003 to 2009.
In 2009, however, Google was made aware of the Rhode Island investigation and took steps to stop its support of these companies. Google started requiring online pharmacy advertisers to be certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practices Sites program and hired an outside company to detect pharmacy advertisers exploiting flaws in the Google's screening systems, the DOJ said.