Google settles with the FTC over kids’ in-app purchases

At least $19 million going back to consumers

Google has agreed to pay full refunds totaling at least $19 million to consumers who were charged for purchases that children made via apps without parental consent from the Google Play app store.

The settlement is part of the third case by the Federal Trade Commission about unauthorized in-app purchases made by children. It settled with Apple for $32.5 million in January and it filed a complaint against Amazon, which has said it won’t settle over the charges.

In Google’s case, the FTC said that since 2011, consumers have reported children had made unauthorized charges ranging from 99 cents to $200 within kids’ apps downloaded from the Google Play store.

Most interaction with online services on mobile devices occurs through apps, as opposed to a Web browser, according to comScore. The firm estimates seven out of every eight minutes of media consumption on mobile devices is done through an app. In the U.S., comScore estimates that the Android operating system covers 83.8 million smartphone subscribers vs. 67.4 million on iPhones.

According to the FTC complaint, when Google introduced in-app charges to the Google Play in 2011, they were not password protected. As a result, children could buy virtual items just by clicking on popup boxes within an app while they used it. In mid- to late-2012, Google instituted a pop-up box that asked for a password before a payment could be made but that still opened up a 30-minute window during which a password wasn’t required.

“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 of unauthorized in-app charges incurred by children of at least $19 million within 12 months after the settlement becomes final.

Google is also required to change its billing practices to obtain express, informed consent from consumers before billing them for in-app charges.

“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.”

Media Articles

Vice Media creates a Fuss with new hire

Blue Ant Media's Ryan Fuss joins company as its first chief revenue officer

Lesley Conway joins Montreal start-up Impax Media

Company specializes in ad-supported checkout gates

Why printed flyers still work

Death knell for circulars sounded years ago, yet they remain key to the marketing mix

Millennials spend one day a week on mobile (Survey)

Watching videos and online TV accounts for almost half of device time

The debate over third-party measurement is over

Advertisers won. Google and Facebook open the books.

Shaw goes with Moat on viewability

Third major publisher this year to partner with Moat on analytics

Mitch Dent leaving Rogers Media

Sales veteran will take six months to assess his next step, likely in an entrepreneurial role

Crowdrise and Secret Location build an epic virtual tower

Ed Norton's charity teams with Toronto agency on VR app for Giving Tuesday

Live TV overwhelmingly popular, VOD growing rapidly (Study)

Latest Numeris report finds about 90% of overall viewing is still live