FTC Requires Google Refund $19 Million For In-App Purchases

Business / Mobile

Google is the second company who have settled with the FTC over supposed unauthorized in-app purchases made by children without authorization from the account holder. The order requires that Google refund a minimum of $19 million over the next 12 months.

Many “freemium” apps are free to download and play, but popular games often offer in-app purchases to entice users to get a leg up in the game, or in some cases, to be able to continue playing at all. One of the key issues when this model was first introduced through iTunes and the Google Play Store as early as 2011, is that purchases made on mobile devices weren’t always password protected. This resulted in hundreds, if not thousands, of dollars in unauthorized purchases being made inside of an installed application – most often by children of the primary account holder.

According to the FTC’s complaint against Google – which followed a similar one against Apple, who settled back in January to the tune of $32.5 million – Google unfairly billed consumers for millions of dollars through these transactions. As a result, Google has agreed to inform consumers who placed an in-app charge to inform them of the refund policy within 15 days of the order. If the account holder requests a refund, Google must provide a refund to them.

Initially, in-app purchases did not require a password – a simple click of a pop-up box and the purchase was complete. In 2012, Google did enable in-app purchase password protection which required users to enter a password for purchases if they enabled that functionality. However, this opened a 30 minute window in which a password was not required, thus allowing further (and sometimes unauthorized) purchases. As part of the settlement agreement, Google also agreed to modify its billing practices.

It’s no surprise that Apple and Google have settled with the FTC on this issue, and one can only assume that Amazon – who the FTC filed a similar complaint against in July – will follow suit and settle as well.

Do you think the FTC’s complaints and resulting settlements are fair to consumers? Let us know in the comments below, or on Google+, Facebook, or Twitter.

  Source: MarketWatch

Featured image modified from Wikimedia

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