Google to Pay $19 Million to Settle FTC App-Billing Claims

Sep 04, 2014 2:12 pm ET

(Updates with Google statement in fifth paragraph.)

Sept. 4 (Bloomberg) -- Silicon Valley’s biggest names keep running afoul of Washington for failing to get parental consent for charges racked up by children playing games on mobile devices.

Google Inc., the third company accused of wrongly billing consumers for unauthorized purchases made by children on mobile applications, agreed to refund at least $19 million in a settlement today with the Federal Trade Commission.

“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,” FTC Chairwoman Edith Ramirez said.

Google is the latest company to find itself in the FTC’s crosshairs over unauthorized in-app purchases. Apple Inc. in January agreed to pay $32.5 million to refund consumers. Amazon.com Inc. was sued by the agency in July, accused of failing to get permission from parents for charges incurred by children. Amazon is fighting the lawsuit.

Google said it was pleased to resolve the complaint.

“We’ve already made these product changes to ensure people have the best Google Play experience possible,” Google spokeswoman Niki Christoff said in a statement.

Virtual Food

Many mobile applications available from Google Play that are used by children include virtual items available for purchase such as food for fish. They can range from 99 cents to $200, according to the FTC.

Google received thousands of complaints about unathorized charges made by children. One parent called Google and complained that he thought his account had been hacked, not realizing that his son had made unauthorized purchases while playing the game “Tiny Monsters.”

Google employees referred to the issue as “friendly fraud” and “family fraud,” according to the FTC complaint.

Google, based in Mountain View, California, agreed to provide full refunds to consumers with a minimum payment of $19 million to settle the FTC’s complaint. It also agreed to modify its billing practices in the Google Play app store to get express consent from users.