• The Wall Street Journal, Friday, May 13, 2011 11:34 AM

In a regulatory filing released this week, Google said it was setting aside $500 million to potentially resolve a case with the Justice Department. Citing people familiar with the matter, The Wall Street Journal now has learned that the case was a U.S. criminal investigation into allegations that Google made hundreds of millions by accepting ads from illegal online pharmacies.

"The federal investigation has examined whether Google knowingly accepted ads from online pharmacies, based in Canada and elsewhere, that violated U.S. laws," WSJ reports. Google gave few details in its filing about the probe this week, only saying that it involved "the use of Google advertising by certain advertisers."

Search engines can be liable if they are found to be profiting from illegal activity. In December 2007, for example, Google, Microsoft and Yahoo agreed to pay a combined $31.5 million fine to settle civil allegations brought by the Justice Department that they had accepted ads from illegal gambling sites.

Read the whole story at The Wall Street Journal »