Lawsuit Alleges Google's 'Astonishing' 'Wrongdoing' In Canadian Drug Controversy

Google probably hoped it was putting a controversy about drug ads to rest last week, when it said it had agreed to pay $500 million to settle a Justice Department investigation. The settlement resolved claims that Google allowed Canadian drugstores to advertise to U.S. consumers on AdWords between 2003 and 2009.

Instead, however, the company is facing even more questions -- not to mention litigation. This week, at least three separate lawsuits were filed by shareholders against company executives. "The breadth and scope of the wrongdoing was astonishing," shareholder James Clem alleges in one of the lawsuits. "From 2003 to 2009, Google knowingly assisted Canadian pharmacies in advertising the illegal sale of prescription drugs.... Moreover, Google took steps to block other countries [from] peddling prescription drugs online, but allowed he practice to continue for Canadian pharmacies."

Clem alleges that Google officers and directors breached their fiduciary duty to shareholders. The other lawsuits, filed by New York resident Avrohom Gallis and Pennsylvania resident Patricia McKenna, contain similar allegations. All three cases were brought in U.S. District Court for the Northern District of California.

Meanwhile, advocacy group and frequent Google critic Consumer Watchdog are asking lawmakers to summon Larry Page to testify at Sept. 21 hearing of the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee.

"Flouting the law for six years and enabling others to use its search engine to break U.S. law shows a remarkable arrogance," Consumer Watchdog says in a letter to Sens. Herb Kohl and Mike Lee, chairman and ranking member of the subcommittee. "Such an attitude is highly relevant to Google's attitude toward competition and antitrust law. If the company was involved in illegal drug sales to boost ad revenue, it likely wouldn't shrink from illegal anticompetitive behavior to grow revenue either."

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