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Google to pay $500 million to settle pharmacy ad investigation

PROVIDENCE, R.I. — Google has agreed to pay $500 million to settle a U.S. government investigation into the Internet search leader's distribution of online ads from Canadian pharmacies illegally selling prescription drugs to U.S. consumers.

The settlement means Google will not face criminal prosecution for accusations that it improperly profited from ads promoting Canadian pharmacies that illegally imported drugs into the United States, Rhode Island U.S. Attorney Peter F. Neronha said. It is the first time an Internet search engine is being held responsible for the illegal distribution of drugs.

The settlement delivered a stinging rebuke for Google, whose motto is "don't be evil." In announcing the settlement, authorities left little doubt that Google had misbehaved.

From its vantage point, Google crossed into a shady area of prescription drug advertising in pursuit of higher profits, which have boosted its stock price and enriched its employees since the company's initial public offering in 2004.

The figure represents the gross revenue Google collected in ad buys from hundreds of Canadian pharmacies, plus the earnings generated from the illegal drug sales to American consumers from 2003 to 2009, federal investigators said.

Google to pay $500 million to settle pharmacy ad investigation 08/24/11 [Last modified: Wednesday, August 24, 2011 9:58pm]
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