Google's $500 Million Pharmaceutical Advertising Settlement and Implications for the Rogue Pharmaceutical Ecosystem

September.08.2011

On August 24, 2011, the Department of Justice announced that it had entered into a $500 million forfeiture settlement with Google to resolve potential criminal claims arising from the promotion of illegal pharmaceuticals through Google's AdWords online advertising program. The details that have emerged regarding the violations and resulting settlement illustrate the reliance of rogue pharmaceutical providers on Internet marketing platforms, the scale of the problem and at least preliminary steps for preventing use of such platforms for criminal conduct.

The U.S. government has been targeting the misuse of online search platforms for the sale of illegal pharmaceuticals since at least 2003, when the U.S. Food & Drug Administration banned ads promoting prescription drugs and drugs shipped from abroad. While a number of major online search platforms complied with this mandate, Google continued to actively assist in the development and execution of online advertising campaigns, promoting such drugs to U.S. consumers--leading to the August forfeiture and settlement. In announcing the forfeiture, the Department of Justice said the $500 million figure represented Google's advertising revenues as well as the gross revenues earned by the illegal "Canadian" pharmacies as a result of their affiliations with Google. 

In addition to imposing one of the largest forfeitures in U.S. history, the settlement requires Google to take steps to prevent illegal pharmaceutical marketing through its search advertising program. Google must require certification of pharmaceutical advertisers by the national Association of Boards of Pharmacy's Verified Internet Pharmacy Practices Sites ("VIPPS") program. It must also institute improved electronic and manual systems for screening pharmaceutical ads and must enforce policies forbidding acceptance of ads from non-U.S. pharmacies. The settlement further requires Google to report to the government and provides for government oversight of its compliance. 

While the precise effects of the settlement remain to be seen, one outcome should be the serious curtailment of the use of major search engine advertising programs by rogue pharmaceutical operations. From a financial standpoint, the calculation of a forfeiture amount that adds the revenues earned by both the search engine and the illegal activity would appear to provide an enormous disincentive to these programs, especially in the context of programs that, by their own nature, are public and visible. However, as a practical matter, rogue pharmaceutical websites can also be expected to continue to rely on the same "blackhat" methods for manipulating organic search engine results that they have always relied upon, including voluminous use of keywords unrelated to a webpage, "doorway" pages (i.e. meaningless pages or redirects designed only to promote keywords), "link farms," keyword spamming, hidden text, presenting different pages to search engines than a human visitor would see and other means intended to trick search engines into placing a website high in the search rankings.

And, of course, the sprawling operations behind rogue pharmaceutical websites remain, including pharmaceutical affiliate marketing programs, "bulletproof" hosting companies and domain registrars, creators of networks of compromised computers ("botnets") used to promote pharmaceuticals through spam and offshore banking and credit card facilities for processing online transactions. There are even offshore search advertising networks designed to promote products and services that major networks will not allow—particularly, rogue pharmaceuticals. In addition, some such networks and their customers may engage in techniques such as search and browser "hijacking" in order to leverage the traffic seen by major sites.

As industry initiatives and efforts such as the government's action against Google reduce the effectiveness of paid advertising through major search engines, the distributors of rogue pharmaceuticals will no doubt try to fill the gap through other means and, if history is a guide, achieve no small measure of success in doing so. Among the likely avenues for filling this gap are reliance on marginal ad networks, emerging social media marketing channels, spam marketing and investment in botnets. For example, a number of recent reports indicate that most current spam e-mail is delivering malware that infects user computers in order to make them part of botnets that can send further spam or carry out other malicious activity. These attempts to build botnet capacity suggest continued reliance on such infrastructure. Thus, while limiting access to major search advertising networks is an important development, there is a continuing need for creative international enforcement efforts and strong law enforcement partnerships focusing on the infrastructure that enables distribution of rogue pharmaceuticals.