Summary:

The $500 million fine that Google would be paying to the government was a bit of a mystery when it was first revealed back in May, although…

The $500 million fine that Google would be paying to the government was a bit of a mystery when it was first revealed back in May, although it was soon discovered to be related to online pharmacies. Today, it’s all been made official, and some new details have come out about the offenses that led to the giant fine against Google (NSDQ: GOOG).

Google got in trouble for allowing Canadian pharmacies to purchase AdWords ads targeting U.S. consumers. Importing Canadian drugs is illegal under U.S. law.

The massive fine represents the sum of Google’s ad revenue from Canadian pharmacies, as well as revenue made by the pharmacies themselves. That makes it “one of the largest financial forfeiture penalties in history,” according to a statement issued today by the Department of Justice.

The DOJ said that Google was aware the drug imports were illegal since 2003, and that from 2003 to 2009 the company actually offered customer support to the pharmacies, helping them with placing and optimizing AdWords purchases.

While importation may be illegal, the comparatively low cost of drugs in Canada has driven U.S. consumers to purchase them-both online and in-person-for years now. But the authorities note: “While Canada has its own regulatory rules for prescription drugs, Canadian pharmacies that ship prescription drugs to U.S. residents are not subject to Canadian regulatory authority, and many sell drugs obtained
from countries other than Canada which lack adequate pharmacy regulations.”

In February 2010, Google changed its policies so that only online pharmacies accredited by professional groups would be allowed to advertise through AdWords.

The investigation was led by the U.S. Attorney’s office in Rhode Island.

Contacted about the settlement, a Google spokesman told paidContent: “We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

Comments have been disabled for this post