Google forks over $500 million for allowing illegal pharmacy ads on their search engine

(CBS/AP) - You know those pesky spam ads for Canadian pharmacies illegally selling prescription drugs to American consumers? Well, Google has had to pay $500 million to settle a U.S. government investigation for distributing said online ads.

The search engine will not face criminal prosecution for allegedly profiting from these sinister ads promoting Canadian pharmacies who import drugs into the country, U.S. Attorney Peter F. Neronha told Associated Press.

The $500 million represents the gross revenues Google collected in ad buys from the Canadian pharmacies, plus the earnings generated from the illegal sales of drugs to American consumers, federal investigators said.

Google said in a statement that it shouldn't have allowed Canadian pharmacies to advertise prescription drugs to U.S. consumers.

Federal officials say Google knew what it was doing as early as 2003. Such transactions included the sale of prescription drugs without prescriptions from a licensed medical practitioner, federal prosecutors said.

The investigation shows how vulnerable the company's automated AdWords system is. But, it's a major moneymaker for Google and is expected to generate more than $30 billion in revenue this year alone.

Google acknowledged holes in its ad system in a federal lawsuit filed last fall against dozens of "rogue" online pharmacies that were finding ways to place ads for drugs despite the company's efforts to prevent abuses.

The Canadian pharmacies would find loopholes, such subtle misspellings of drug names in order to generate ads alongside the results on Google's search engine.