Photo: Android Open Source Project
Google has agreed to settle a Federal Trade Commission lawsuit alleging that it unfairly billed consumers for millions of dollars in unauthorized charges made by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices.
Under the settlement, Google will provide refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it gets “express and informed” consent from consumers before charging them for items sold in mobile apps.
Since 2011, Google billing consumers for charges made by kids ranging from 99 cents to $200 within kids’ apps downloaded from the Google Play store, the FTC’s lawsuit against Google alleges.
“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”
This is the FTC’s third case on unauthorized in-app charges by children.
In January, the FTC announced a settlement with Apple, requiring Apple to provide refunds to consumers who were billed for unauthorized charges by children – paying a minimum amount of $32.5 million – and to get consent for in-app charges.
In July, the FTC filed a lawsuit against Amazon.com seeking refunds for consumers and an order requiring approval for in-app charges.
In many apps used by children, users are invited to accumulate virtual items that help them advance in the game, but the lines between virtual money purchases and real money purchases can be blurred, the FTC lawsuit said.
When Google introduced in-app charges in 2011, it billed for the charges without any password requirement. In 2012, following criticism from parents, Google offered a pop-up password box. However, the new pop-up didn’t tell consumers that entering the password once opened up a 30-minute window that would allow children to rack up unlimited charges, the FTC said.
During this time, thousands of consumers complained to Google, with some parents saying their children had spent hundreds of dollars on in-app charges without their consent. Some parents said their children didn’t understand buying virtual in-game items were causing their parents to be billed.
Google employees referred to the issue as “friendly fraud” and “family fraud” in describing kids’ unauthorized in-app charges as a leading source of refund requests, according to the lawsuit. It said that that Google’s practice has been to refer consumers seeking refunds first to the app developer.
The settlement requires Google to contact all consumers who placed an in-app charge to inform them of the refund process for unauthorized in-app charges by children within 15 days of the order being finalized.
