On Thursday, Federal Trade Commission said Google has agreed to settle charges and pay around $19 million to consumers who were charged for in-app purchases made by their children while playing mobile games without parental consent.
The Google settlement is one of the third cases by the Federal Trade Commission about unwarranted app purchases made by children from the app store. In January, it settled with Apple to the tune of $32.5 million and it also filed a complaint against Amazon, which has apparently said it won't settle over the charges.
According to the FTC, since 2011 consumers have reported children using Android phones had made unauthorized charges ranging from 99 cents to $200 in children-oriented games without parent’s permission.
According to comScore, most interaction with online services on mobile devices occurs via apps as opposed to a Web browser. The firm reckons seven out of every eight minutes of media consumption is done via an app on mobile devices. ComScore estimates that the Android operating system covers nearly 83.8 million smartphone subscribers vs. 67.4 million on iPhones in the U.S.
According to the FTC complaint, in 2011 in-app purchases did not require a password. This resulted in children purchasing virtual items just by clicking on popup boxes within an app while they used it. In mid 2012, Google did enable in-app purchase password protection which required users to enter a password for purchases if they enabled that functionality. But that still opened up a 30-minute window during which a password wasn't required, thus allowing further and sometimes unauthorized purchases. As part of the settlement agreement, Google also agreed to modify its billing practices, to obtain express, informed consent from users before billing them for in-app charges.
"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."
The settlement will require Google to provide full refunds within 12 months after the settlement becomes final. The search giant will need to contact customers individually who were charged for in-app purchases and inform them of the process required to obtain a refund for unauthorized in-app purchases.
Besides that, Google has pledged to withdraw all delusive apps from its Play store and has since promised to create guidelines to stop app developers from deluding mobile users, particularly the children.
"We've already made product changes to ensure people have the best Google Play experience possible," Google said in a statement. "We're glad to put this matter behind us so we can focus on creating more ways for people to enjoy all the entertainment they love."