Google Inc agreed to settle the complaint filed by the Federal Trade Commission (FTC) on allegations that the company unfairly allowed children to make in-app purchases using mobile apps downloaded from Google Play store and incurred millions of dollars in charges.

google and ftc

Terms of the settlement

Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) agreed to provide refunds to consumers whose kids made purchases on Google Play without their authorization. The FTC said the minimum total amount of the refund should be $19 million

The search engine giant also agreed to modify its billing practices to ensure that it will obtain expressed and informed consent from consumers before making charges for items sold in mobile apps.

Under the settlement, the commission also required Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) to contact all consumers who placed an in-app charge, and informed them about the refund process within 15 days after the order has been finalized. The search engine is required to make prompt refunds upon the request of the account holder.

A spokesperson for Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) already implemented the changes “to ensure people have 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.”

In a statement, FTC Chairperson Edith Ramirez said, “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.”

FTC allegations

The FTC alleged that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) violated its regulations prohibiting unfair commercial practices by billing consumers for in-app purchases by children without first obtaining authorization from account holders since 2011.

The commission indicated that many consumers reported hundreds of dollars of such unauthorized in-app charges in their accounts. The FTC noted that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) billed in-app charges without any password requirement or another method to obtain account holder authorization when it was first introduced on Google Play on 2011. The billing method enabled children to incur in-app charges by simply clicking on pop-up boxes within the app.