If Google is practically speaking the gatekeeper for these kind of shady dealers (because it sees both the consumer demand and the bad actors), then the most efficient system is one where Google is given both the responsibility and the tools to do the regulation.
In fact, Google might be in a better position to regulate this than the states are. What should the states do -- individually browse for ads on Google and then call up those places? This still places Google front and center.
This is the same reason central planning is a horribly inefficient system -- yes, in principle you can have the entire economy send their data to the central government, then the central gov't comes up with a plan and redistributes it to every factory -- but in practice a lot goes wrong in putting so many links.
How can Google be expected to do this at scale? To act as an extra layer of regulation that even local government cannot or will not provide?
Whoever possesses the data and information is the only actor who can meaningfully perform regulation. You can't effectively regulate blindly.
Right now Google has the most data, more than the various state and local governments.
So there's really two possibilities:
1. Google is 'responsible' for the regulation, under the delegated authority and monitoring of governmental bodies
2. Local governments retain the responsibility to regulate these entities, but they need the power to compel the necessary data from Google so they can do the job. That requires a lot of trust in various levels: that Google provides the correct data, that there is a way for local government to act on it, and for there be the right social 'API' in place where Google only shows ads from licensed entities.
At the end of the day, these are practically speaking the same thing, except we use different language to describe it. The 2nd possibility has more hops in it, so it's less efficient, but maybe it's safer.
It's kind of like how we do money transmission and terrorism finance regulation now -- the government is nominally responsible for making sure bad actors can't send money, but the only way to do that is for banks, PayPal, et al to send data to the government.
When it comes to unpopular or corporation-unfriendly speech, yes. When it comes to outright scams, no.
I wouldn't call not actively helping bad actors promote their scams "heavy handed", anyway. Are rehab scam operators "marginalized persons" now?
One of the major characteristics of a "scam operator" is this situation: Andy runs a treatment center that only takes Cigna. He gets a call from Bob, who has BlueCross. Bob can either do private pay at Andy's Center, for $20k. Or Andy can refer Bob to Mike's Center for BlueCross Patients, where Bob can get treated for $5k out of pocket.*
If Andy and Mike have a business relationship where they refer patients to each other, and either end up benefitting, they are breaking the law.
* Option 2: Andy tells Bob "sorry, we can't treat you. Try calling someone else."
Until the past year or so, all levels of government were unable to track down the shady operators. IMO, it's not Google's job to do what law enforcement was unwilling to do. (Now, Google could be extra ethical on this, but why would they be? Generally, we expect corporations to follow law enforcements lead, rather than hold them to a higher standard.)