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The Federal Trade Commission has announced a settlement agreement with Google, for $19 million, in a complaint that claimed Google was billing parents unfairly for in-app purchases that were made by their children without the parent's consent.

The FTC stated:

"According to the complaint, in mid- to late 2012, Google began presenting a pop-up box that asked for the account holder's password before billing in-app charges. The new pop-up, however, did not contain any information about the charge. Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time."

The FTC said that Google had violated the FTC Act's prohibition on "unfair" commercial practices. Under the terms of today's settlement, Google will offer "full refunds of unauthorized in-app charges incurred by children" to their parents. It will also modify its own in-app purchase policies so that Google must "obtain express, informed consent from consumers before billing them for in-app charges."

What do you think of this settlement deal between Google and the FTC?

Source: FTC

 

Reader comments

Google settles with FTC for $19 million due to in-app charges dispute

73 Comments

I say some blame has to be put back to the parents. STOP HANDING YOUR CHILDREN YOUR WALLET THEN WONDERING WHY YOUR MONEY IS MISSING.....go figure...

Most parents are dumb enough to give a child a tablet/phone with the parents active account on it.

Just like the California state law that now requires opting out of the Kill-Switch when first activating a device, we now need a "I'm not smart enough to know what I'm activating Opt-Out screen", so the majority of STUPID PEOPLE can't complain.

It's kinda like buying a Top of the Line vehicle and only using the steering wheel and gas pedal, while never paying attention to that fact that you have Navigation, Radio, Power Windows, Power Door Locks, A Sun roof, Trunk release, heated seats, a armrest, and many other things.

Apple made people okay with being STUPID...!

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As you read further down this thread you will see people that blame Google.
These are the bad parents.

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And you're ignorant enough to think all practices by google are logical... I pity you for not even remotely thinking of the counter argument

And let me guess, you Have no kids!!

NAILED IT!!

Now I'm going on break

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I like to say it's like handing a kid the keys to your car and asking others to pay for the damage.

I take it you have no kids?

That's a pretty blanket statement when there are loads of variables that play into this. The main thing here is that if your not very tech savvy (which alot of the population still is) and download an app or your child asks you to download an app that says free in the store you pretty much leave it at that. Not realising until later on that in app purchases just cost you a pretty penny.

So a seemingly responsible parent gets dooped for shady business practices.

SO on behalf of any parents out there that fell into that, stop being a douche bobinc. ;)

The problem with your theory is that downloading a free app from the store doesn't require you to enter your password, so the 30 minute time window wouldn't apply.
As for the part where the FTC alleges that Google didn't inform users about the 30 minute time window, let's out this in a different (and more extreme) scenario: I buy a gun and shoot myself. Can I now sue the manufacturer of that gun because I didn't read the directions where it explains that a bullet will come out at lethal velocity when I pull the trigger? The result is more severe, but the overall scenario is the same.

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Not a very good analogy, but lets roll with it. So say I bought that gun and wound up shooting myself. Now, I have basic gun knowledge and can use and fire one with ease. Now lets say this particular gun has changed in a way that isn't well documented or advertised outright to keep consumers of said gun informed. I eventually shoot myself because a part that needed cleaning jammed/misfired etc. Would there be some kind of accountability then?

Like I said the gun analogy inst a very good one.

All I am saying is that its not necessarily the parents fault as some of the comments here seem to point out. I personally have never had this happen as I am very tech savvy and like to tinker. This isn't the case for the majority of the public though. Smart phones get pushed over dumb phones now a days and some people just don't know enough about it to defend themselves.

Is google responsible for some things, yes. Could the parents be responsible as well yes.

I can say one thing is that after that first time it happens and parents get burnt with high bill purchases if it happens again then its definitely the parents fault. A simple blanket statement saying that its always the parents fault is asinine at best.

This is becoming a big problem though and more and more frequent. The government has unlimited money (practically) to pursue this. It is becoming practice for government entities to threaten legal action for money. This is straight up blackmail and coercion. If Google broke some law or reg, they should pay an established fine associated with the law or reg in question, not some arbitrary figure the government decides at whim. This is a shakedown.

"blackmail and coercion"...what?

These fines seem arbitrary but those 2 words do not fit this situation at all. Where was the blackmail or coercion in this case?

Blackmail and coercion, as in pay up or we're going to drag your ass into court and make a public spectacle out of it. Google never broke any laws, so the government has zero authority to treat them this way. And they've been doing this more and more.

Agreed. Suppose Google only had 19 million dollars. The government would have put them out of business for something that wasn't their fault. Bad parenting is what cause this.

Google is doing the right things...in my case, my kids bought more than $300 mistakenly because of lagging of the app and when i called Google and explained to them, they refunded the charges immediately and without any hard times. This type of customer service is SUPER. Many thanks to Google.

Hey dude. Just make a separate email for your kids and use Google play gift cards for that account.

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I'm fine with this. It's not a huge amount of money by any means, and this is a system that Google (and Apple, etc) should've had in place already. Obviously it's the parents' responsibility to oversee what their kids are doing with their Android devices, but if Google's going to bill their devices (especially tablets and Chromebooks) as devices for the family with kid-friendly educational applications, then Google has a responsibility to make it easy for parents to keep their kids from making purchases without literally looking over the kids' shoulders at all times.

I'm sorry but your comment is ridiculous.

If Google offers a service, and said service has the ability to cost you money, it is not their job to insure that you are being smart about using it.

The simple fact of the matter is some parents don't monitor their kids like they should. These are the same parents that don't take responsibility when little Johnny runs their bill up. It's always someone else's fault they are a bad parent.

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The fact that is not huge just reaffirmed in my mind is just extortion. It's big enough to look like a big number, but small enough that is cheaper not to fight it.

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Exactly. I call it blackmail and people are like, "what do mean blackmail? The government can't do that!" Well they are/have been doing it, so wake up.

You keep using this word...I do not think this word means what you think it means.

edit: Here, I will help you - Blackmail, the action, treated as a criminal offense, of demanding money from a person in return for not revealing compromising or injurious information about that person.

agreed...

black·mail
ˈblakˌmāl
noun
the action, treated as a criminal offense, of demanding money from a person in return for not revealing compromising or injurious information about that person.

I think the word you're looking for is extortion...

ex·tor·tion
ikˈstôr SHən
noun
the practice of obtaining something, especially money, through force or threats.

I was going to say the same thing 1Loud! Still, I knew what the poster meant when he said blackmail, even if I did hear extortion.

What are you a lawyer? I'm not the Attorney General. No one is talking about bringing felony charges against the government. You've completely missed the point. Good job.

You don't have to be the attorney general to use the correct words.

That is just something intelligent people do...

The problem is that there *are* already protections in place to prevent this. The 30 minute window is intended as a convenience. If you were to buy 20 songs from the play store, you certainly wouldn't want to have to enter your password each time. The real problem is that people don't bother to educate themselves on what they're doing. I'd be interested to know how many of the people complaining that this happened to them has just turned off the password protection completely. Then, there's also the personal responsibility of educating your kids. I let my 7 year old play on my tablet all the time, which he had been doing since he was about 5. We have had several discussions about how IAP work, so he knows that games can ask him to pay for stuff and that he's not allowed to do it. He can read the word free, and I've taught him what a dollar amount looks like so he knows to ask if he sees one anywhere. And, on a couple of occasions, he has asked. I remember at least once, he had clicked on something that was trying to get him buy gems or something. He asked, showed me the screen, I told him no and closed the window and that was that. It's not rocket science.

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wait a minute, you can't possibly be suggestion that people actually do some rear parenting are you?

So now car makers need to start paying for damages because a dumb dad left the car keys in the car with Jr. inside and he went ahead and crashed it. Cool.

I mean 1 is a crime mixed with property damage and a dose of insurance problems and the other is a password protection issue. But if you can't see the difference then they are exactly the same thing.

Or the simple fact that it's the parents carelessness that lead to damage (in all sorts of the meaning)

But hey, keep trying to over complicate it.

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It was the 30 minute password cleared window without the option to turn it off that was the problem...not parental carelessness.

No, what Google was doing was like disallowing the doors to be locked and the keys to be removed from the ignition for 30 minutes.

"But we just wanted to make it convenient for you so you don't have to keep unlocking your doors if you just ran inside somewhere. Nobody will try to get in your car in less than 30 minutes after you left it, so it's no big deal, right?" xD

So all I have to do is download a ton of apps and say it was my kids?

I wonder what else this works for in life?

I mean heck let's go pop out some kids and force someone else to keep an eye in them. /s

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Control your dumb kids. No one wants to take responsibility anymore. Just have big brother fix it and make it so we don't have to think or use judgment anymore.

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Or give parents the option to require a password for EVERY purchase. This wasn't available at the time of the dispute, and why Google settled. It is available now.

Parents can choose to not give kids access to an account with a credit card and only let them have set dollar amounts.

Sooooo I guess these same parents let kids order all types of stuff on cable/ pay per view as well, then sue the cable provider. Whatever &@#!!

I thought this also, and wondered why it never happened, since you have to manually turn on parental controls on all cable company boxes.

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Because you have the option to do it for every purchase - if a parent chooses not to, that's their problem.

The issue here, as with Apple (settled) and Amazon (still fighting), is that at the time the time of the dispute there was no option to require it for every purchase, just once every 30 minutes.

If this was really about Google and Apple doing terrible things, why does the government keep the money? Ya it would be a pain in the ass to give it back to people legitimately harmed by this, but come on. It just seems like a government department wanted some more money, and found a way to extort it from huge private companies.

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I think this is stupid. Google is essentially being held liable for some of their customers' lack of sense and lack of good parenting.

Its not the cost of the fine. It is the reason this happened. Can anybody anymore, take responsibility for the children they bring into this world? It is not my responsibility or Google's to monitor the actions of someone elses children. You brought them here, take charge of them! These kiddies should have never had their hands on the phone unattended in the first place.

Yes I know, stuff happens with children, but in this case adults should realize they are the ones that opened the door to let the big bad wolf into the house.

So, 12-16 year old's shouldn't be allowed to use a phone (or even a WiFi only tablet) unless an adult is watching over their shoulder the whole time?

I don't have to worry about it since I use Kidz Mode or w/e it's called to keep them locked into only the apps I choose and it also disables all radios while they are in it. But, not everyone is a tech nerd like me and don't mind their 13 year old playing a game on their tablet every once in a while.

They probably thought they were safe since you have to enter a password to buy stuff. Oops, I let them buy one thing and now they unexpectedly have 30 minutes of unlimited access.

No one is saying that schiznatch, but there is no reason to give your kids access to an account that has a credit card or bank card attached to it.

Where does the $$ go to in these types of situations? Refunds or class action lawsuits to the people who were affected, or does the gov't keep it all?
They should've known better than to leave our accounts open to iap for that long, but it seems to me that they corrected the problem and issued refunds whenever ppl asked. So what's the problem?

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I so don't see this as being fair. Hell, I bought my mother a tablet and to keep her from accidentally making purchases (she is totally tech illiterate), I set her up with an account that has no credit card. She can consciously choose to add funds, but doesn't have to worry about accidentally spending more than she intended.

Edit:
Just wanted to add that we have driving required courses/tests, gun safety courses/tests, but very little in the way of required fiscal responsibility courses.

This is bs. It's called watching your damn children, or don't let them mess with your cell phone. Everyone is always so close to blame someone else for their shortfalls as a parent.

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The ultimate responsibility comes down to the parent. Tech savvy or not, when downloading anything into any device you ought to know what you're putting onto your device whether it be for yourself or your kids.

I don't have kids for myself but I have a niece and baby cousins who are always in my care. I never have my account active when they are using my tablet and when they ask me to get something. I check out what I'm getting. The same applies to any store physical or virtual BE A RESPONSIBLE CONSUMER!!

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So this $19 million is being returned to the customers, right? Unless the FTC racked up $19 million in unauthorized IAPs...

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