It’s been a difficult month for Google, and the company is bound to take another hit in the morning as a Wall Street Journal article makes the rounds — an article that offers new details about the government sting that compelled Google to pay $500 million after acknowledging that it both allowed and helped Canadian pharmacies sell drugs in the U.S. in violation of federal law.
To be clear, the Department of Justice investigation and settlement with Google is a done deal and there’s nothing new happening specific to those legalities. But the WSJ article shines a new light on how the U.S. government used a con man (and currently a convicted felon) in a sting operation against Google in early 2009.
As the WSJ reports, David Whitaker first tipped federal agents to Google’s complicity with his pharmaceutical activities when he was arrested in Mexico in 2008 and sent back to the U.S. to face wire fraud, conspiracy and commercial bribery charges. That case wasn’t directly related to an online pharmacy that he had set up in 2006 — an operation that sold steroids and human growth hormone to U.S. residents and advertised through Google’s AdWords program. Whitaker tells the Journal that Google was aware of what he was doing.
“It was very obvious to Google that my website was not a licensed pharmacy,” Mr. Whitaker wrote to the Journal. “Understanding this, Google provided me with a very generous credit line and allowed me to set my target advertising directly to American consumers.”
Federal prosecutors used Whitaker as their point man in a four-month sting against Google in early 2009. While in custody and being guarded by federal agents, Whitaker used a pseudonym (Jason Corriente) to begin using AdWords to promote a website, www.sportsdrugs.net, that the government had created to sell HGH and steroids.
Google first rejected it, along with an anti-aging website called www.NotGrowingOldEasy.com. But the company’s ad executives worked with Mr. Whitaker to find a way around Google rules, according to prosecutors and Mr. Whitaker’s account.
The undercover team removed a link to buy the drugs directly—instead requiring customers to submit an online request form—and Google approved it. “The site generated a flood of email traffic from customers wanting to buy HGH and steroids,” Mr. Whitaker said.
A quick WHOIS check reveals that notgrowingoldeasy.com is, indeed, registered currently in the name of Whitaker’s fake “Jason Corriente” character.
The sting expanded to include new websites, including one that sold the controversial abortion pill RU-486 — a pill that can only be taken in doctors’ offices. The WSJ reports that Google approved ads for that site, too.
Google’s ad team in Mexico approved the site, so U.S. consumers searching for “RU 486″ would see an ad for the site. Google ad executives allowed the agents to add the phrase “no prescription needed.”
The WSJ article paints a very damning case against Google’s behavior prior to the $500 million settlement with the DOJ.
Kent Walker, Google’s general counsel, gave this statement to the WSJ:
“We ban not just ads but also advertisers who abuse our platform, and we work closely with law enforcement and other government authorities to take action against bad actors.”
In a month that’s already seen Google suffer black eyes for a mess involving Google Chrome sponsored blog posts, along with negative reaction and requests for an FTC investigation related to Google+, and an incident where Google had to apologize to a Kenyan local business directory after trying to poach its customers, the details coming to light in Wednesday’s Wall Street Journal are about the last thing the company needs right now.
There’s more discussion on Techmeme.