Google to Pay $19 Million in FTC Lawsuit Against In-App Purchases

Google has settled charges brought by the federal government, consenting to reimburse $19 million to consumers whose children may have been deceptively lured into buying items through the Android app store, reports the Washington Post.

The Federal Trade Commission stated that since 2011, children were easily duped by Google into using Android phones to buy items. Those items were as cheap as 99 cents but could have cost up to $200 without the children getting approval from their parents.

The FTC has been investigating “in-app purchases” on devices featuring software created by Apple, Amazon, and Google for three years. Apple agreed to pay $32.5 million last January, while Amazon said in July that it would not capitulate to the FTC charges. The FTC alleged that the three tech giants were not forthcoming to parents and children about the capacity to buy items while they were playing games or other apps on their phones.

Lawsuits brought by parents allege that the tech giants and apps developers used “predatory practices” in order to induce children to buy gold coins as well as other items without apps store passwords. Apple now has different standards; Amazon now offers safety tools so children cannot make purchases without their parents’ consent.

FTC Chairwoman Edith Ramirez stated, “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.”

Google had no passwords for in-app purchases until 2012, when parents complained; the company responded by pop-up password boxes. But the FTC charged that those boxes weren’t enough because Google didn’t explain that once the password was inputted, children had 30 minutes to buy anything they wanted. The FTC said that despite a looming class action lawsuit, Google still wouldn’t explain what it had done or change the procedure that lured children to make their purchases.

Hundreds and thousands of dollars were spent by the children in unauthorized charges, such as virtual in-app purchases for gold coins that would enable the children to advance in their game levels.

The FTC stated that Google employees would call the issue “family fraud” and “friendly fraud” within the company; Apple and Google have altered their procedures because of the FTC’s investigations. In August, Ayelet Waldman, a mother of four children, ripped the Kim Kardashian app because her son paid $120 for virtual clothing.

Google issued a statement saying, “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.” The company will fully refund unauthorized in-app charges incurred by children and require “express, informed consent” from consumers if they make in-app purchases. Google also said Android customers who were victimized by unauthorized in-app charges will be contacted as to avenues they can take to be refunded.