Google is paying $500 million for allowing illegal pharmacy ads on their network. Image: Flickr / marcusq / CC-BY-ND
The U.S. Federal Government and Google have been locked in a debate over display advertising. The federal government wants to hold Google responsible for illegal pharmacies that use their service to advertise. After a protracted negotiation, the case will be settled when Google pays a $500 million fine.
Illegal pharmacy advertising
As we first explored in May, the federal government was considering holding Google responsible for ads promoting illegal pharmacies on its network. Google has stated that it is trying to regulate these illegal pharmacies, but it is a “cat-and-mouse game” that the company is always one step behind on. Google has officially banned advertising for prescription drugs in the U.S. by Canadian pharmacies, but this is a relatively recent move.
The settlement over pharmacy ads
Google and the Justice Department have come to a settlement over Google’s allowing of pharmacy ads. Google will pay a $500 million fine to the Justice Department, an unprecedented amount. The fine is intended to be both punitive and remunerative, intended to cover the profit Google made from illegal pharmacies running advertisements on their AdWords service. A Justice Department statement on the matter says:
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. This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies.
Google suing advertisers
Despite the settlement with the Justice Department, Google is not done with illegal advertisers. In September of last year, Google filed a civil suit against advertisers engaging in illegal activity. Google deactivates ads for illegal activity in many areas to protect the company from further legal action.
What this means for affiliates
For affiliate marketers, the Google and Justice Department settlement has serious consequences. There are many opportunities to partner with products or services online that may or may not be entirely legal. It can be very difficult to meet the legal requirements in every city, state, municipality and nation where your website appears. If there is any question about the legality of advertisements you are hoping to run, you should consult with a lawyer and ensure that you have business insurance to cover potential losses.
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