Google has agreed to refund at least $19 million to parents who were billed for the purchases made by their children without their authorization.
The agreement is the result of a complaint filed by the Federal Trade Commission alleging that Google is using unfair practices to bill consumers for unauthorized charges worth millions of dollars that were incurred by the children.
The children made the unauthorized payments through in-app purchases from apps and games downloaded from the Google Play Store that are used in devices running the Android mobile operating system.
In addition to the $19 million refund, Google said that it will be changing its billing methods to make sure that users are required to give express and informed consent before they, parent or child, are billed for purchasing items within apps.
The FTC's complaint states that Google, since 2011, had been employing the practice that violates the FTC Act's prohibition on such unfair commercial methods. There have been many reported cases by consumers of such unauthorized charges through in-app purchases, the FTC stated in its complaint.
The FTC also noted that it is unclear whether the money that is being spent to make the in-app purchases is real money or virtual money within the app.
In-app purchases are options that are found in many apps that can be downloaded through the Google Play Store. The in-app purchases, with costs that can range from a few cents to hundreds of dollars, allows users to unlock certain features or purchase items that can be used within the game.
However, Google has been billing consumers for such in-app purchases made by their children without acquiring authorization from the Google Play account holder, which are not the children but rather the parents.
Since Google first launched in-app purchases for apps on the Google Play Store in 2011, the FTC reported that the purchases did not require any passwords or authentications, which allowed children to make purchases by simply tapping on pop-up boxes.
In the middle to late 2012, Google started showing pop-up boxes that asked for the password of the Android account holder when making an in-app purchase. However, the pop-up box did not show how much the consumer is being charged. In addition, once the password is entered, it opens up a window of 30 minutes when the app will not ask for the account holder's password, which essentially allows children to keep on making purchases without the consent of their parents.
"For millions of American families, smartphones and tablets have become a part of their daily lives," said Edith Ramirez, the chairwoman of the FTC. "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."