SEARCH GIANT GOOGLE has settled action taken by the United States’ Department of Justice, after displaying advertising promoting online Canadian pharmacies in the US.

A statement released by the Department this afternoon said Google had agreed “to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States”.

Google’s decision to allow the ads had resulted in “the unlawful importation of controlled and non-controlled prescription drugs into the United States”, the statement added.

The settlement is one of the largest in US history and represents not just the money Google made by accepting the adverts, but also the revenue made by Canadian pharmacies from sales generated as a result.

As with most countries, the US only allows prescription drugs to be sold through domestic chemists, claiming that the administration of drugs through overseas pharmacies means its Food and Drug Administration cannot vouch for their safety.

The Department accepted that while Canada had its own methods for regulating drug sales, outlets administering prescriptions to non-residents were not subject to its guidelines.

Google’s last set of accounts, filed in May, had already set aside $500m for “a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers”.

At the time Google said it believed the outcome of the case would “not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows”.

Google stopped allowing Canadian pharmacies to advertise to US customers in February of last year, and Reuters quoted a statement from the company today which acknowledged that it shouldn’t have allowed the ads in the first place.