Google Prepared to Settle in Illegal Drug Ad Investigation

$500 million charge against earnings explained

Remember that $500 million that Google recently set aside for unknown reasons? It turns out that the company may use that huge sum to settle with the Department of Justice in a criminal investigation into whether the site made huge profits off of ads from illegal online pharmacies, according to the Wall Street Journal.

Google disclosed the $500 million in a filing to the SEC earlier this week, but didn’t specify what it would be used for. The company remained mostly mum on the issue of the investigation, saying only that it involved “the use of Google advertising by certain advertisers.”

According to sources, the investigation has been looking into allegations that Google has made hundreds of millions of dollars by accepting ads from pharmacies in the U.S. and Canada illegally hawking prescription drugs online. The DOJ probe is also trying to find out just how much Google knew about these advertisers’ activities—and whether company execs consciously turned a blind eye. From a legal standpoint, the WSJ says, it’s important to note that the illegal activity was promoted through Google’s paid advertising service, not displayed in its search engine results.

If Google does end up agreeing to a $500 million settlement, it would be one of the largest penalties ever paid by a company in dispute with the government.