By Chelsey Dulaney
Google Inc. has agreed to spend $250 million to boost its online
advertising and compliance measures to settle a shareholder lawsuit
over years-old charges that the search giant knowingly accepted
illegal advertisements from online pharmacies.
Google already agreed in 2011 to pay $500 million to avoid
Justice Department prosecution on charges that the ads led to
illegal imports of prescription drugs and could have put American
consumers at risk of taking mislabeled or tainted medicine.
The Justice Department said the forfeiture--which represented
the illicit revenue earned by Google and the money earned by the
Canadian pharmacies--was one of the largest by a company in the U.S
at the time.
The shareholder lawsuit, initially filed in 2011, alleged that
Google breached its fiduciary duty to shareholders by accepting the
ads.
The settlement, approved in August by a committee of independent
Google directors, will be heard in an Oakland, Calif. court on Jan.
21.
Google said it has agreed to spend at least $50 million a year,
for a total of up to $250 million, to help curb online activities
that threaten Google users. As part of that effort, Google will
form a user safety initiative to focus on disrupting the operations
of rogue pharmacies online.
Google also agreed to implement and enforce written policies and
procedures to ensure compliance with federal and state laws. The
company also said its general counsel will review every situation
in which a Google employee is convicted of a felony. Presumptively,
any employee convicted of a felony will be terminated and receive
no severance payments.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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