Google settles with Government for 500 million for deceptive ads

Well this is interesting. The New York Times is reporting that Google has agreed to fork over 500 million dollars to get rid of the government suit. The suit is from people placing Adwords Ads that deceptively (and illegally) marketed pharmacies on the Google search and content networks. Here is the really interesting part. In the article it also states that Google had to implement new policies and guidelines to ads that decreased their profits by 22%. Wow. Some might remember that Google put out a statement early this year when the investigation first began:

…As we and others build new safeguards and guidelines, rogue online pharmacies always try new tactics to get around those protections and illegally sell drugs on the web. In recent years, we have noticed a marked increase in the number of rogue pharmacies, as well an increasing sophistication in their methods. This has meant that despite our best efforts—from extensive verification procedures, to automated keyword blocking, to changing our ads policies—a small percentage of pharma ads from these rogue companies is still appearing on Google.

I guess admitting that they had no idea how to stop it was not good enough for the government. Advertising networks beware.... from the DOJ press release: “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 Deputy Attorney General Cole. “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. In my opinion this really paves the way for states to go after advertising networks hardcore. Much like we saw with Attorney Generals going after the Ringtone industry for their affiliates deceptively marketing ringtones (claiming they were free when they were not). I am not going to name names but you know there are a handful of advertising networks that let you get away with making completely uncompliant statements in advertising. But where does this stop? Does it open up liability for marketplaces like Clickbank that have become havens for rediculas guarentees of income in the make money online space? I guess we will see.