Google Inc (GOOG) Settles FTC Case Involving Kids’ In-app Purchases

Search engine giant Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) agreed to settle a case filed by the Federal Trade Commission (SEC) related to the unauthorized in-app purchases made by kids on Google Play.

FTC complaint

The FTC alleged that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) unfairly charged the accounts of consumers whose children made in-app purchases on Google Play without first obtaining their authorization.

In its complaint, the FTC said the search engine giant violated its regulation prohibiting unfair commercial practices by billing consumers for in-app purchases by children without the authorization of account holders.

The commission stated that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) billed in-app charges without a password requirement or another method to obtain the authorization of an account holder since 2011, when it was introduced on Google Play.

The search engine giant’s billing method allowed children to make in-app purchased by simply clicking on pop-up boxes within the app. The FTC said children could incur in-app charges by simply clicking on popup boxes within the app as they used it.

The FTC said it received reports from many consumers claiming hundreds of dollars of such unauthorized in-app charges in their accounts.

Settlement details

Under the settlement agreement, Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) agreed to provide a total refund of at Least $19 million to consumers whose kids made unauthorized in-app purchases.

The FTC required the search engine giant to contact consumers and inform them regarding the refund. Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) was ordered to make prompt refunds upon the request of the account holder.

The search engine giant also agreed to modify its billing practices to ensure that it will obtain expressed and informed consent from consumers before charging their accounts for items sold in mobile apps.

A spokesperson for Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) said the company already implemented changes to its billing practices “to ensure people have best Google Play experience possible.” The spokesperson added that the search engine is glad to put the issue behind so it can focus on creating more ways for people to enjoy all the entertainment they love.

“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,” said FTC Chairperson Edith Ramirez in a statement.