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International marketing implications of Google’s $500 million settlement

For a company that’s motto is Do No Evil, Google sure ends up in a lot of trouble for evil-like behaviour, at the least behaviour that many people consider evil. One of the latest scandals involves drugs. Despite several warnings and US federal laws against the practice, it seems Google continued to run ads by Canadian pharmacies offering prescription medicines in the US. These drugs aren’t approved by the FDA (Food and Drug Administration) and that is a big no-no.

The government undertook a criminal investigation onto the role that Google played in allowing the ads to continue and found that it willfully ignored the ads and in this way aided the cross-border sale of unregulated drugs. One would think that the penalty would be severe, but Google got off lightly by agreeing to forfeit all revenue it generated from the ads – a substantial $500 million. The forfeit was part of a nonprosecution agreement, which means that Google acknowledged it was wrong but won’t be slapped with a criminal record.

Peter J Henning, who is a professor at Wayne State University Law School, says that the agreement could have significant implications for SEOs and digital marketers when it comes to online advertisements, particularly those that target international audiences.

It also begs the question: who is responsible for ensuring online ads adhere to various international marketing laws?

Google is particular about its online ads, so is Bing. There are certain things that you can and can’t do. These are to protect consumers from companies that would offer them the world and give them a grain of sand. But they don’t cover actual marketing laws. Shouldn’t adherence to these laws be the responsibility of those doing the marketing?

Isn’t holding Google responsible like buying a dud second hand car and then suing the newspaper that ran the ad?

Aren’t we back to shooting the messenger?

Google has admitted that it should never have allowed the ads in the first place. It also claims that it stopped running the ads “some time ago” and that they have implemented “rigorous controls” to stop the same mistake from happening again.

But, the government claims to be in possession of emails from Google employees that clearly indicate the company was protecting the Canadian pharmacies to allow them to continue advertising. If this is the case then one has to wonder at the nonprosection agreement. Surely they go some way to prove complicity?

According to Henning, it’s far more complicated than that. He asserts that the US Justice Department knew that its claims could be challenged in court. There are no precedents of this kind to support the allegations and there is no telling how many constitutional loopholes there are that would trip up the case.

He states, however: “The Internet allows messages to be better focused on particular groups of potential customers. With that ability comes the growing possibility that the Justice Department will view search engines as more than mere passive conduits of information, and instead as potentially active participants in conduct that may violate the law.”

In the meantime, one of Google’s shareholders is suing the company. She claims that Google was either aware of the ads, or should have been aware of them, which brings us back round to arguments about complicity and accountability.

We’d be interested to hear your thoughts on the matter.

(Image by Roland, CC by 2.0, via Flickr)

 

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One Comment

  1. jamie perry
    Posted on December 3, 2011 at 10:10 pm

    k

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