Inside Google

It became clear over the weekend why Google agreed to a whopping $500 million settlement with the Justice Department to end criminal charges that it aided in the sale of illegal drugs from Canada. Co-founder and CEO Larry Page knew that the Internet giant was breaking the law.

The settlement was no mere slap on the wrist. It amounted to about 20 percent of Google’s first quarter earnings.  The amount represented the gross revenue Google made from selling the illegal drug ads and the revenue the Canadian pharmacies made on the sales.

But without the settlement, the extent of Page’s and other executives complicity in illegal activities would have been revealed publicly at a trial.  Perhaps Page himself would have faced time in the slammer.

Thomas Catan and Amir Efrari summed the situation up in the Wall Street Journal:

Behind Google Inc.’s decision this week to settle a U.S. criminal probe into ads it carried for unlicensed online pharmacies lies a previously undisclosed factor: Justice Department investigators believed company co-founder Larry Page knew of, and allowed, the ads for years.
Sorting through more than four million documents, prosecutors found internal emails and documents that, they say, show Mr. Page was aware of the allegedly illicit ad sales. Under this week’s $500 million settlement, those emails won’t be released, avoiding the possibility of disclosure at trial.

You can make a strong argument that Americans pay the highest drug prices in the world and we ought to be to able to buy drugs in Canada if we want to do so.  In fact, Consumer Watchdog organized the Rx Express in 2004 to take seniors to Canada to have their prescriptions filled in drug stores there.

If Page sincerely wanted to change the law and help make drug prices more affordable, we’d welcome him to the fight. But that’s not what the motivation was. What he wanted was to tap a lucrative revenue stream and pump Google’s profit machine.

“Larry Page knew what was going on,” Peter Neronha, the Rhode Island U.S. Attorney who led the probe, told the Journal. “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.”

Neronha wouldn’t be specific about Google’s damning emails.  But I think now that he has gone this far, the prosecutor owes it to us, as Google would say, “to organize the information” in them and “make it universally accessible.” In other words, release the data so we know what Page knew and when he knew it.

Once again Page has demonstrated the sort of arrogant, we-know-better approach that seems to typify the engineering culture that permeates the Googleplex. This time the corporation was held responsible for its unlawful actions, but corporations are run by people.  Sooner, rather than later, it will be necessary to hold executives like Larry Page accountable when they knowingly let their companies break the law.