Google has been ordered to fork over $500 million pursuant to a settlement with U.S. government regulators. As reported in the NY Times: “Regulators announced today that Google will pay $500 million to settle government charges that it has illegally shown ads for pharmacies that operate outside the law…” The U.S. government alleged that Google was complicit in allowing drug companies in Canada sell drugs illegally into the U.S.
This is significant for a few reasons:
1) This represents the largest financial forfeiture penalty in history.
2) Big pharma is incredibly powerful and their weapon of choice is NOT fair competition: it’s the Department of Justice and the Food and Drug Administration.
3) When fighting with the government, it’s never a fair fight. If Google can’t win, you can’t win.
4) The government always shoots first and aims second. As the market evolves and technology changes how we connect and communicate, regulators will always be one step behind operating with intense skepticism. How can they reasonably expect Google to control how its platform gets used? Are they going to regulate AT&T on what gets discussed over the telephones? Where does the line get drawn? Platforms will always be used imperfectly because they’re used by imperfect people.
I obviously have some serious concerns with this news. What are your thoughts?
Update, from the DOJ press release:
According to Deputy Attorney General James M. Cole; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; and Kathleen Martin-Weis, Acting Director of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA/OCI), this forfeiture is one of the largest ever in the United States, and represents “the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.”
“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.”
U.S. Attorney Neronha, added that this settlement was about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. consumers, by compelling Google to change its behavior,” and that this kind of forfeiture “will not only get Google’s attention, but the attention of all those who contribute to America’s pill problem.”