Google Inc. recently set aside $500 million to cover a possible settlement of a U.S. government investigation into the Internet search leader’s distribution of online ads from illegal pharmacies, according to a report published Thursday.
The Wall Street Journal said the U.S. Attorney’s office in Rhode Island and the U.S. Food and Drug Administration have been leading the criminal probe into whether Google improperly profited from ads promoting drug sales by pharmacies or people without the proper licensing. The newspaper cited unnamed people familiar with the matter.
Spokespeople from Google, the FDA and Peter Neronha, the U.S. Attorney in Rhode Island, all declined to comment Thursday.
The Journal’s article illuminates a mystery triggered earlier this week by a bombshell contained in Google’s quarterly filing with the Securities and Exchange Commission.
The SEC documents included a vague reference to a Justice Department investigation into the usage of Google’s automated system for placing ads alongside search results and other content at hundreds of thousands of websites. Google raised even more intrigue by subtracting $500 million from its first-quarter earnings to cover a potential settlement.
Google co-founder Sergey Brin then dodged a reporter’s question about the government investigation at a software developers’ conference presented by the company in San Francisco.
The evasiveness raised questions about how deeply the government might be digging into Google’s ad network, a moneymaking machine that is expected to generate more than $30 billion in revenue this year. Regulators in Europe are already taking a broad look at how Google’s ad system works as part of an antitrust investigation into whether the company’s business practices are stifling competition.
Although this U.S. probe appears to be focused on a narrower issue, it’s still a touchy matter for Google.
Besides sticking Google with a big bill, the inquiry could draw more attention to how vulnerable Google’s automated system has been to the machinations of shady operators.
Google acknowledged the problem in a federal lawsuit filed last fall against dozens of “rogue” online pharmacies that were finding ways to place ads for drugs despite the company’s efforts to prevent the abuses. The individuals identified in the complaint were based in New York, Tennessee and Ohio.
In one of the more common practices, the illicit drug dealers would plug subtle misspellings of drug names frequently entered into Google’s search engine to generate ads alongside the results. For instance, one illegal drug advertiser spelled the anabolic steroid Dianabol as “Diano bol” in Google’s automated system to produce an ad, according to the lawsuit in San Jose federal court.
Google has obtained court orders banning some of the rogue pharmacies named in the lawsuit and is still seeking injunctions against the others.
“Rogue pharmacies are bad for our users, for legitimate online pharmacies and for the entire e-commerce industry,” Google lawyer Michael Zwibelman wrote in a company blog post on the same day the company filed its lawsuit in September. “So we are going to keep investing time and money to stop these kinds of harmful practices.”
The lawsuit came seven months after Google imposed new restrictions on the kinds of pharmaceutical ads it would accept in the U.S. and Canada. The new rules were supposed to only allows ads from U.S. pharmacies that had been accredited by a special program run by the National Association Boards of Pharmacy. In Canada, the accreditation had to come from the Canadian International Pharmacy Association.
Google’s critics have complained in the past that the company and other websites haven’t been vigilant about policing pharmaceutical ads because they are so lucrative. Drug and health care advertising generated about $1 billion in Internet spending last year and is expected to grow to nearly $1.9 billion by 2015, according to the research firm eMarketer Inc.
“Mufasa: The Lion King” and “Sonic 3” Rule Box Office For 1st Weekend Of 2025
The Walt Disney Co.'s "Mufasa: The Lion King" claimed the No. 1 spot on the North American box office charts over the first weekend of 2025.
The photorealistic "Lion King" prequel earned $23.8 million in its third weekend, according to studio estimates Sunday. Paramount's "Sonic the Hedgehog 3," which has dominated the past two weekends, wasn't far behind.
"Sonic 3" stayed close with a 3-day estimate of $21.2 million, bringing its total domestic earnings to $187.5 million and helping the overall franchise cross $1 billion worldwide. "Mufasa's" running total is slightly less, with $169.2 million.
In third place, Focus Features' "Nosferatu" remake defied the fate of so many of its genre predecessors and fell only 39% in its second weekend. Horror films typically fall sharply after the first weekend and anything less than a 50% decline is notable. "Nosferatu," which added 140 screens, claimed $13.2 million in ticket sales, bringing its running total to $69.4 million since its Christmas debut. The film, directed by Robert Eggers, already surpassed its reported production budget of $50 million, though that figure does not account for marketing and promotion expenses).
No new wide releases opened this weekend, leaving the box office top 10 once again to holdovers from previous weeks. Several have been in theaters since Thanksgiving. One of those, "Moana 2," claimed the No. 4 spot for Disney in its sixth weekend in theaters. The animated sequel earned another $12.4 million, bumping its global total to $960.5 million.
The Bob Dylan biopic "A Complete Unknown," dipped only slightly in its second weekend, bringing in $8.1 million. With $41.7 million total, it's Searchlight's highest grossing film since Disney acquired the company in... Read More