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Google settles pharmacy ad probe for $500m

Google Inc. has reached a $500m legal settlement with the U.S. Justice Department to avoid prosecution over allegations that it knowingly accepted hundreds of millions of dollars in ads from Canadian online pharmacies.

The Justice Department said that the forfeiture was one of the largest ever in the U.S. and represented the gross revenue received by Google as a result of Canadian pharmacies advertising on Google, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.

The ads resulted in the unlawful importation of controlled and non-controlled prescription drugs into the United States, the Justice Department said.

"The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers," said James Cole, deputy attorney general. "This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history."

A Google spokesman said: "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."

(Published by WSJ - August 24, 2011)

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