F*****ng google!
Google wins fight to keep Adwords FBI drug sting docs secret
Federal court gags Mississippi attorney general – for now
Special Report Google has won a battle in its legal campaign to keep millions of documents relating to an FBI drugs probe into the company under wraps - by using a law originally designed to combat porn sites.
A group of US states had opened a probe, led by Mississippi’s elected state prosecutor and more than 20 other states, which sought to find out whether Google was complying with the outcome of a drugs-marketing sting operation that the advertising giant settled out of court in 2011. Yet the states’ enquiries are now blocked until the ruling can be overturned.
Google won an injunction in the Southern District of Mississippi federal court on 3 March which prevents the state's attorney general, Jim Hood, from enforcing a previous injunction against Google.
It also stops him from bringing civil or criminal charges against the ad giant for "making accessible third-party content to Internet users". In plain English, this injunction stops Hood from pursuing allegations that Google turned a blind eye to ad revenues coming from dodgy pharmacies peddling controlled drugs to consumers without prescriptions.
Google assured a court in 2011 that it was stopping the practice.
The injunction is a big setback for Hood, who is leading efforts to uncover an explosive cache of court documents which supposedly reveal how top Google executives knew about the dodgy pharmacies' ad spending and turned a blind eye to it.
The good, the bad and the Googly
In recent decades state prosecutors have led the way in corporate criminal cases, with Big Tobacco lawsuits and New York state’s dot-com bubble Wall Street settlements amongst the most prominent examples.
Hood, Mississippi’s corporate crime fighter (dubbed “the last Democrat in Dixie”) has tangled withvarious financial giants, pharmaceuticals companies and even the Ku Klux Klan, bringing some $850m of fines into his state's coffers. Mississippi is the poorest state in the USA.
In 2013 Hood was also one of 23 state attorneys who wanted to know whether Google was complying with an out-of-court legal settlement on drugs marketing which it had signed in 2011. In the settlement (a “non prosecution agreement”, or NPA – full document, PDF, 15 pages), Google agreed to pay a £500m forfeiture and promise not to help sellers of fake and re-imported drugs without seeing proof of age or a prescription.
Hood has claimed (PDF, one page) that despite the half-a-billion dollar forfeiture, Google was refusing to delist the fake pharmacies. Google allegedly shifted the business from Adwords to YouTube and continued to promote the sale of controlled substances to minors. So the allied states issued a 72-page subpoena.
"The attorneys general have asked Google to clean up its act, and it's done nothing but obfuscate," said Hood in 2013, after their letters and requests to meet were ignored. Last year the attorneys subpoenaed Google for documents relating to the 2011 out-of-court settlement. Significantly, a number of documents held by Rhode Island state, relating to the FBI/FDA sting operation on Google which led to the half-billion payout and NPA, have never been made public.
In December Google used the Communications Decency Act (CDA) to bring the states’ probe to a halt. The CDA had been rushed onto the books in 1996 after the first “cyberporn panic” in order to criminalise sexual and obscene websites. It was rapidly struck down for being overbroad and violating the First Amendment. Ironically, given that the CDA is being used to block investigations into the Internet’s most powerful company, the law began life as the “Internet Freedom and Family Empowerment Act”.
Google's “aggressive and overbroad” use of the CDA worries some legal experts. If Google succeeds in this battle – and it has won the first round – “then it would also prevent the Federal Trade Commission from enforcing analogous federal laws against Internet intermediaries. Such practices could include fraud, conspiracy, and aiding-and-abetting violations of state and federal controlled substances acts,” says one expert in a must-read analysis of Google’s blocking lawsuit, published in the American Spectator.
In other words, companies like Google could - if it wins this legal war - operate beyond the reach of the law. Even Goldman Sachs, at its multi-tentacled zenith, couldn’t dream of such a privilege.
How did Google get here? And what does it want to keep quiet?
For years, the state attorneys-general allege, Google promoted the sale of unlicensed and fake drugs and other controlled substances in its search results, receiving money for doing so under its Adwords programme. While some of the unlicensed drugs were safely manufactured in the USA and re-imported from Mexico and Canada, many were not, including lethal fakes manufactured in China and Russia.
After an 18 year old died, AOL and Microsoft quickly cleaned up their respective shops – requiring age verification, for example. Google was slow to follow suit, as its Adwords product became big business.
The trade only came to a halt after a sophisticated sting operation by the Food and Drug Administration (FDA) and the FBI. Investigators set up over a dozen fake trafficking operations and applied to market them using Adwords. They gained an insight into how Google facilitated the trade, gathering around four million documents. Rhode Island, which has a long history of fighting organised crime, joined the investigation.
As the investigation neared the indictments stage, Google settled. In 2011 it signed the NPA, fending off an indictment that could have seen charges brought against Google’s management. As part of that settlement Google agreed to pay a $500m forfeiture and acknowledged the extent of its involvement. It has since committed an additional $250m to settle shareholder lawsuits over its involvement in the drugs business.
There are several things about the NPA that are unusual. It’s an agreement not to prosecute, which is subtly different from a “deferred prosecution agreement” or a “plea agreement”. Google maintains that it never settled with the states – an important thing to bear in mind as the litigation rolls on. And Rhode Island, once the most aggressive of the states' criminal prosecutors, has been silent since it emerged that $280m of the forfeiture was funnelled to the state. Much of the evidence remains under seal … in Rhode Island.
Who knew what?
A clue into why Google is fighting Mississippi so aggressively came from comments made by Peter Neronha, Rhode Island’s US attorney (a Federal appointee, not the elected state A-G). As the Wall Street Journal reported at the time:
“Larry Page knew what was going on,” Peter Neronha, the Rhode Island U.S. Attorney who led the probe, said in an interview. “We know it from the investigation. We simply know it from the documents we reviewed, witnesses that we interviewed, that Larry Page knew what was going on” … “[T]his is not two or three rogue employees at the customer service level…," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."
“There’s something about that agreement that Google really, really, really doesn’t want to discuss,”notes one lawyer.
Around 1,000 pages of material from the Rhode Island archive have emerged – in a very obscure case, and in highly redacted form.
The case is DeKalb County Pension Fund v. Page as heard before the Chancery Court of Delaware (case number 7694-CS). Google was said to have submitted evidence including quotes from directors of the company.
So the battle for criminal prosecutors since 2011 has been twofold: to ascertain the level of knowledge that top of the company had about its activities, and to determine whether Google has really cleaned up its act or simply shifted the traffic to another portion of Google.
What’s not in doubt that Google has succeeded in throwing a cloak over the affair, by using diversionary tactics in which it portrays itself as a victim. A few days before Google sued Hood under the CDA, stories appeared that Hood was in Hollywood’s pocket. Using highly selective excerpts from the stolen Sony emails, Google painted Hood as a threat to “internet freedom” and the “open web”.
Yet copyright isn’t Hood’s major concern – IP issues are a footnote in Hood’s 72 page subpoena. Third party liability wasn’t the states’ concern here. And Hood’s lifetime campaign contributions from Hollywood, described by VC-backed site The Verge as “lucrative”, amounted to $2,500 from the MPA and $4,000 from Comcast and NBC. Barely enough to pay for a cocktail party.
Google argued the states that were suing Google over drug trafficking were “attempting to revive SOPA”. Google’s friends joined in. A number of groups including the EFF, the Consumer Industry Association, the Center for Democracy and Technology and Public Knowledge filed an amicus brief backing Google against Hood. All four groups have received Google funding; all four appear in the 2012 “shill list” that emerged in the Oracle Java trial.
And, in an even stranger twist, Republicans in the Mississippi legislature attempted to muzzle Hood too. Hood answers to the voters who elected him but Republicans wanted to change the law so he couldn’t pursue corporate criminal cases without their say-so, through a “Permission to Sue” bill. The bill was rejected.
The Rhode Island document trove remains invisible, for now. ®
Comments
Or on a more serious side you seem to have an unhealthy obession on the dark side. Desperate to uncover (or repeat others accusations) the evilness of Google. Do you like preaching to the converted who will lap up your viewpoint and barely give it any rigorous discussion?
DED is the man when it comes to smashing what is the shit hole combination of giggle/adenoid. This guy has some well motivated hate towards G/A, (doesn't every educated human?) it shows in most of his posts, but he hasn't got the writing chops of DED
Other than that, we all know giggle is EVIL.