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Google pressured to police drug sales

Several state attorneys general are pressing Google to make it harder for its users to find counterfeit prescription medicine and illegal drugs online, marking the second time in the past three years that the firm has drawn government scrutiny for its policies on rogue Internet pharmacies.

Their complaints, conveyed in a letter signed by 24 top state prosecutors, led to private meetings with Google executives this year in Denver and Washington, producing contentious exchanges about the company’s practices. Now, while some of the attorneys general are pleased with Google’s response to their concerns, others want the tech giant to go further.

At the same time, the company’s past practices have raised the ire of shareholders, who have alleged in two little-noticed lawsuits that a lax stance by the company toward prescription drug ads until 2010 put it in legal and financial jeopardy.

Google, which failed to persuade a California judge to dismiss the suits, entered settlement talks last month after attorneys for the shareholders obtained emails showing that top executives warned then-Chief Executive Eric Schmidt and co-founder Larry Page more than a decade ago about the risks of accepting such ads.

Google declined to comment on the shareholder suits. But the company said it has poured resources into trying to stamp out rogue Internet pharmacies, disabling 4.6 million pharmaceutical or health supplement ads that did not meet its standards last year.

And since 2010, when it toughened its advertising policy, the number of Web ads placed by unlicensed pharmacies dropped by 99.9 percent, according to Google.

The renewed pressure that Google is facing over illegal pharmaceuticals revives what has long been a thorny issue for the Internet giant. In 2011, Google forfeited $500 million – in addition to changing its advertising practices – to avoid federal criminal charges for its role in helping unlicensed Internet pharmacies market drugs to U.S. consumers.

The episode has also drawn attention to Google’s ties with the White House. In a move considered unusual by legal and ethical experts, the Obama administration allowed Google to participate in a White House event on the topic while under federal investigation.

White House spokesman Eric Schultz said the forum highlighted “efforts of various companies, not just Google, to curb rogue online pharmacies.” He said the event “had no impact” on the Justice Department case against the company.

In its talks with the attorneys general, Google said it was hiring 120 new employees this year to flag rogue ads and videos. It also said it was eliminating 1,200 predicted search phrases – such as “how to become a drug dealer” – that led people to potentially illegal or dangerous websites.

The steps Google has taken, outlined in a February letter to six attorneys general, have not fully satisfied several of the state prosecutors.

The attorney general leading the charge, Jim Hood of Mississippi, has threatened to pursue legal action if Google does not go further by removing from its search results sites that sell illicit drugs and other illegal products.

“We’re trying to make them do right,” he said, adding that the company is “making billions” from sites promoting dangerous and illegal content.