In a recent report, Google stated that it is setting aside $500 million to settle an investigation brought on by the U.S. Department of Justice and the Food and Drug Administration. The investigation came about when Google was suspected of gaining revenue from pharmaceutical companies that were breaking U.S. law and turning a blind eye to their illegal practices.
The investigation has been kept moderately quiet, with only scant information being released. Sources close to the issue told the Wall Street Journal that the “investigation has examined whether Google knowingly accepted ads from online pharmacies, based in Canada and elsewhere, that violated U.S. laws.” As the investigation winds down, it would appear that Google, whose paid ads are under fire, not the search engine, is ready to settle the dispute.
While Google aims to diversify its revenue, it is still an ad-based company. Nearly 95% of its first quarter revenue came from paid advertising. Search engines can be held liable if they profit from advertising by sites that knowingly break U.S. laws. This was proven in 2007 when Google, Yahoo, and Microsoft paid a combined $31.5 million to settle civil allegations made by the Justice Department that they had accepted advertising from illegal gambling sites.
One evidence of the Justice Department’s crack down is found on Google’s search engine. Entering the words “no prescription required” produced an ad from the Justice Department that read “Prescription Drugs. Buying online could mean doing time.” When the same search phrase is entered into Bing and Yahoo, the same ad is nowhere to be found.