Google investor sues board over online drug ads

Reuters News
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Posted: Aug 30, 2011 2:54 PM
Google investor sues board over online drug ads

SAN FRANCISCO (Reuters) - Google Inc's board of directors faces a lawsuit for previously allowing Canadian pharmacies to advertise prescription drugs to U.S. customers via the Web search leader.

The civil lawsuit, filed on behalf of a Google shareholder on Monday, claims the ads -- which Google stopped displaying in February 2010 -- led to what it calls the "illegal importation" of the drugs.

The lawsuit follows Google's $500 million settlement last week of a U.S. criminal probe over such ads. The shareholder charges that the board breached its fiduciary duty and seeks unspecified damages.

Last week, the Department of Justice said Google agreed to settle the investigation into ads it accepted for online Canadian pharmacies selling drugs in the United States.

The advertisements led to illegal imports of prescription drugs into the country, the regulator said.

Google representatives did not immediately respond to a request for comment.

The case in U.S. District Court, Northern District of California is Patricia M. McKenna, derivatively on behalf of Google Inc., v. Larry Page, Sergey Brin, Eric Schmidt et al., 11-4248.

(Reporting by Dan Levine; Editing by Richard Chang)