A Wall Street Journal report published over the weekend details that Google was warned repeatedly by a group of state regulators and industry watchdogs that many of the online drugstores advertising on its network were violating U.S. laws.
As part of the criminal investigation, undercover agents for the Food and Drug Administration contacted Google posing as representatives from rogue Internet pharmacies, according to people familiar with the matter.
The article detils warning after warning that illegal pharmacies were advertising on Google AdWords, some of which were purported to have been ignored by the company, others of which were said to have been taken into consideration. Yet, the reports of rogue pharmacy ads kept coming, indicating at least that third-parties seemed to be more successful than Google at identifying problematic ads. The company also declined to use a database of verified online pharmacies, developed by the National Association of Boards of Pharmacy, until recently.
Here're the specific instances of warnings cited by the WSJ in its story:
- In 2003, the National Association of Boards of Pharmacy (NABP) wrote a letter to Google warning about rogue online drug outlets and providing information about its own VIPPS (Verified Internet Pharmacy Practice Services) database.
- In July 2008, the National Center on Addiction and Substance Abuse at Columbia University (CASA) wrote to then-CEO Eric Schmidt saying it "was able to find prominent displays of ads for rogue Internet pharmacies on both Google and Yahoo in a search for a subset of controlled drugs included in CASA's analysis. This suggests that these search engines are profiting from advertisements for illegal sales of controlled prescription drugs online." (Here's the white paper.)
- In 2008, the NABP again asked Google (and Microsoft and Yahoo) to stop illegal online pharmacies from advertising. Google asked for the list of problematic pharmacy advertisers, and said it was "helpful."
- In 2009, California Western School of Law professor Brian Liang wrote in the American Journal of Law & Medicine that Google (and Yahoo and MSN) "actually allow and profit from illicit drug sales from unverified websites."
Earlier this month, Google said it was setting aside $500 million to potentially resolve a Justice Department investigation. It didn't reveal the focus of the probe, saying only that it involved "the use of Google advertising by certain advertisers."