Well this is interesting. Â The New York TimesÂ is reporting that GoogleÂ 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. Â In the article it also states that Google had to implement new policies and guidelines to ads that decreased their profits by 22%. Â Wow.
Some might remember that Google put out a statement early this year when the investigation first began:
â€¦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 effortsâ€”from extensive verification procedures, to automated keyword blocking, to changing our ads policiesâ€”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…. Â from the Â DOJ press release:
â€œThe 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,â€ said Deputy Attorney General Cole.Â â€œThis 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. Â Much like we saw withÂ AttorneyÂ 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.
18 thoughts on “Google settles with Government for 500 million for deceptive ads”
“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 hope so, the internet is the wild west now.
This is a very interesting article, thanks for always being on top of things!
What does this mean for those of us who advertise on Google?
This does set a potentially dangerous precident against service providers. While I agree that service providers should shoulder their portion of responsibility in ensuring valid and accurate marketing is occuring on their networks, this also potentially punishes networks who are spending a great deal of time and effort verifying their advertisers if one should accidently fall through.
It definately should be a wake up call to providers of all services that they need to spend some effort ensuring illegal activity isn’t occuring and if it is they need to take swift action. Right now it is just totally unclear how much action needs to be taken and how much monitoring is expected. It just isn’t possible to be 100% accurate all the time, so what determines the difference between being proactive and negligent? I hope the government decides to clarify this somewhat as a court case “smell test” just isn’t affordable for any except for companies the size of Google.
wow this is huge. but I bet it is hard to filter out this fake pharmacies.
Well, I think it is the consumers who should wise up and take the risk themselves, otherwise this bull will never end. I’m glad for online pharmacies since I can get drugs without a prescription (Modafinil and Piracetam currently, they help me focus, otherwise I feel like I’m in a fog all day long) for cheap – I am aware of and accept the risks, however I’m sure it’s a good product since I did a ton of research before choosing the provider, and it works just like the brand names, which are 10 times more expensive, literally.
If you’re dumb enough to just click an ad and buy something, anything, online from a sketchy website, well, you got that coming – I’m sure this government over-protection is what makes Americans the most susceptible to various scams online. Although I get that short-term, there may be a reduction in the number of people ordering online, in time, everyone will be better off.
Another reason for the FTC to intervene.
It’s interesting the this amount is EXACTLY the same amount Google had earmarked for the issue back in May. If only all dispute could work out so amicably. 🙂
PS – GOOG up 4.5 points on the day after this settlement announcement. It’s good to be the king!
There is something unfair about it, despite the government’s reasonable effort to stop rogue pharmacies: the government (themselves) are responsible for keeping drug runners out of the country. The border (land and sea) of the US is however too big to be 100% successful. Still, the DEA or the border police never got a 500 mln fine. Isn’t Google’s Keyword Country too big as well?
In my opinion, this makes the American government look desperate for money. It’s no secret the American government doesn’t take care of it’s young entrepreneurs. This hurts Google, consumers, and everyone in between. I use online pharmacies because I have very limited supplemental health care. I accept the ricks of ingesting medication from India. The American government doesn’t help people get healthcare and it punishes corporations who simply provide a channel for those smart enough to help them selves. I’m moving to Canada!
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The real story is the fact that the US government is taking away another freedom of choice. Internet Control is coming and we will have already been dumbed down into accepting it.
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Great site and article you have here. Always an interesting read.
Getting banned from Google Adwords was the best thing that happened to me, although I didn’t think so at the time. Not quite on topic but with the cost of Adwords 500 million’s probably not a very big dent in Google’s pocket.
I haven’t been able to do much with AdWords since Google banned me for life…what a crock.
In this matter, I am happy they banned some people. One of my friend had purchased medicines that you can not find over counter.
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