AH Google Logo Black 1.1

Google Agrees To Refund $19 Million back To Parents Over IAP’s

September 4, 2014 - Written By John Anon

As of today Google Inc. is the latest company to fall foul and admit its wrongdoing with the U.S. Federal Trade Commission (FTC). In an announcement made today by the FTC Google has agreed to settle in a complaint brought against them by the FTC relating to unfairly billing customers with unauthorized charges incurred by children for IAP’s downloaded from the Play Store. For those of you unaware of the situation the FTC originally filed a complaint against Google alleging since 2011 Google have made it too easy for children to download additional app content via the IAP (In App Purchases). As a result in today’s announcement the FTC has advised Google will have to pay a minimum of $19 million back to the parents of children who were able to download IAP’s without their parent’s authorization. This has been a general problem with Google’s Play Store policies. For instance, back in 2011 users did not need to use any password to download IAP’s and as such could download as often as they like without the ‘Account holders permission’.

Late 2012 Google did attempt to address this issue by introducing a pop-up window when trying to purchase an IAP asking users to enter the password. However, this was also problematic as after the password was entered the user could download as many IAP’s as they wanted without having to re-enter the password again for another thirty minutes. As to be expected this was met with a wealth of resistance from account-holders and Google have again now changed the system so that all IAP’s require password entry each time. According to the complaint ‘thousands’ of consumers had complained to Google about unauthorized IAP’s with some claiming their children had racked up hundreds of in-app-purchases. Google initially responded to this by claiming this was an issue of ‘family’ or ‘friendly’ fraud and apparently would in the first instance refer the complainants to the app developers.

In fairness this is not an issue solely with Google but instead the industry as a whole. Earlier this year Apple also decided to settle when a similar complaint was made against them by the IFC in regards to IAP’s from the Apple Store. The Apple settlement was slightly more damaging with the final agreed amount in the region of $32.5 million. Much more recently the IFC have also filed a complaint against Amazon for the exact same IAP issue with the Amazon Store although this complaint is still ongoing.