FTC Snags Google in $19 Million Mobile-App Settlement

Tech Giant Must Refund Consumers for Unauthorized Charges Made by Kids

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Edith Ramirez
Edith Ramirez

Another tech giant -- this time it's Google -- is caught up in a prolonged Federal Trade Commission crackdown. Google settled with the FTC for a minimum of $19 million for allegedly enabling kids to pay to download mobile apps without consent from mom or dad.

The agency will "continue to be vigilant" in investigating the mobile marketplace, said FTC Chairwoman Edith Ramirez during a conference call about the Google settlement this afternoon.

Thousands of consumers complained about unauthorized Google app charges, and some of those charges totaled "hundreds of dollars," said Ms. Ramirez. The minimum of $19 million to be refunded to consumers by Google represents the FTC's "estimate of harm," she said.

The FTC clearly means business in its pursuit of presumably unauthorized charges for things like mobile apps or mobile game points or accessories. In July, the commission filed a lawsuit against Amazon asking for a court order requiring the ecommerce giant to repay consumers for unauthorized charges. The first to come under FTC fire was Apple, which agreed in January to cough up at least $32.5 million to consumers following what FTC Chairman Edith Ramirez said were "tens of thousands of consumer complaints" about App Store charges made without consent.

The Google settlement also requires that the company garner "express and informed consent" for purchases made in its Play Store.

"We've already made product changes to ensure people have the best Google Play experience possible. 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," said a Google spokesperson.

The Amazon litigation is ongoing, according to the FTC.

The agency alleged that in 2011 when in-app payments were introduced by Google, no authorization requirement was necessary to make a purchase, meaning that buying dragon food or a virtual game weapons was as simple as a click. When Google later required the account holder's password to make purchases, users were not notified that the authorization was valid for 30 minutes thereafter.

"The system was still fundamentally flawed," said Ms. Ramirez.

In relation to its settlement with Apple, the FTC claimed Apple did not inform users of a 15-minute time period during which kids could buy virtual items in apps after parents approved an initial purchase for a child.

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