The Federal Trade Commission (“FTC”) recently reached a settlement resolving claims that Google unfairly billed consumers millions of dollars for unauthorized charges made by children, within mobile applications downloaded from the Google Play app store ("In-App Purchases"). According to the FTC's complaint, Google did not have in place sufficient protection to prevent unauthorized In-App Purchases in Google Play.
Under the settlement, the FTC has required Google to obtain express and informed consumer's consent for all In-App Purchases. Furthermore, where an application obtains the consumer's consent to make future charges, the consumer must have an option to withdraw his consent at any time. Under the settlement, Google will provide at least $19 million in full refunds to consumers who were unfairly charged for purchases within mobile applications without their consent having been obtained.
This settlement marks the FTC's third enforcement action this year with respect to unauthorized In-app purchases (a similar settlement was reached with Apple, which amounted to $32.5 million. In addition, the FTC has brought an action against Amazon based on similar charges). These actions prominently demonstrate the FTC's commitment to safeguard the consumers' rights in the mobile ecosphere. In this regard, we encourage our clients to ensure that their mobile apps billing practices (in particular In-App Purchases) are fully compliant with the industries best practices.
In view of this development on the part of the FTC, Google has recently announced it plans to launch next year child-friendly versions of some of its most popular products (including its search site, Chrome browser and YouTube), designated for children aged up to 12. These modified versions will include tools that will allow parents to monitor and manage their children’s behavior.