Google has settled with the United States Federal Trade Commission in regards to children making unauthorized in-app purchases. Google agreed to refund $19 million (that's just the minimum payment, it could be much more) to accounts that were affected by the charges. Essentially, the FTC argued that children, unbeknownst to their parents, could easily make purchases in games, racking up quite the bill for their families.
“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.”
In addition to paying out the refund, Google will have to change their billing method for in-app purchases. This is the third case of this particular kind the FTC has brought. The first, against apple, settled for $32.5 million. Amazon has also been sued. In July, the FTC also went after T Mobile for charges of "cramming" bogus charges into phone bills. It looks like the FTC is set on cutting down wonky charges that come with a mobile phone bill.
During a press call hosted by FTC Chairwoman Ramirez, she noted that the settlement would "require Google to provide full refunds and the $19 million is a minimum, its merely a floor." They reached this floor by making "an estimate of harm." She indicated that the FTC is expecting a higher settlement after all is said and done.
Still, the FTC does not find Google's kiddie in-app purchases malicious, "We are not alleging that there was malicious intent here on the part of Google or intent of any kind." When asked if Google attempted to fight the suit, the FTC stated that the efforts Google made before the lawsuit were "inadequate," and indicated that Google had not attempted to change their charging system.
"No matter the platform, no matter the technology, we want to make sure consumers can make meaningful choices before any charges are billed to them," explained the Chairwoman.
Google has not immediately started making changes to in-app purchases. There will be a 30 day comment period after which, if all goes smoothly, Google will have time to change their charging system. As far as making refund payments, Google has provided "some refunds" but the FTC believes "there are a number of consumers who have not been provided any form of redress." The FTC is unaware how much Google already paid in refunds.
This article is from the archive of our partner The Wire.