14 DAY TRIAL // Google has been hit with a $19 million (€14.6 million) fine by the Federal Trade Commission (FTC) for unfairly billing consumers for millions of dollars in unauthorized charges incurred by children using mobile apps that were downloaded from the Google Play app store.
Under the terms of the settlement, Google will fully refund consumers who received such charges with a minimum of $19 million. Furthermore, Google has agreed to modify its billing practices to make sure that it obtains fast, informed consent from consumers before charging them for in-app purchases or any other items.
The FTC claims that since 2011 Google has been violating the Act which prohibits “unfair” commercial practices such as billing customers for charges made by children. Some received invoices of hundreds of dollars.
“For millions of American families, smartphones and tablets have become a part of their daily lives. 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 Chairwoman Edith Ramirez.
What Google is going through, others have gone through before. This is the third case the FTC has to handle that concerns unauthorized in-app charges that children are responsible for. Apple also settled a similar case back in January, but the company had to pay a lot more than Google, namely some $32.5 million (€25.08 million).
Amazon went through similar issues in July, so Google is not alone. It also means that Microsoft might be next in line given the size of its app store and the number of Windows Phones on the market.
In-app charges are often encountered in apps across the Google Play store and can range from 99 cents to $200 for larger goodie packs. These are most commonly used to advance in the game more easily. While some of these purchases could have been made by mistake, others were certainly done with clear intention, but without the parents’ knowledge.
Such situations have been commonly referred to as “family fraud” among Google employees because there is no ill intention behind the purchases. However, this has become one of the leading sources of refund requests and one of the reasons why Google has implemented a longer time period to cancel one of your purchases.
It is often, however, that parents don’t discover the issue until the bill arrives. Following the settlement, Google will have 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.