Privacy & Information Security Law Blog

On September 4, 2014, the Federal Trade Commission announced a proposed settlement with Google Inc. (“Google”) stemming from allegations that the company unfairly billed consumers for mobile app charges incurred by children. The FTC’s complaint alleges that since 2011, Google violated the FTC Act’s prohibition on unfair commercial practices by billing consumers for in-app charges made by children without the authorization of the account holder.

Google agreed to pay a minimum of $19 million to provide refunds to consumers. To the extent Google issues less than $19 million in refunds within the 12 months after the settlement becomes final, the balance will be remitted to the FTC for use in providing additional remedies to consumers or for return to the U.S. Treasury. Google also has agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers prior to billing them for in-app charges.

This settlement is the FTC’s third case concerning unauthorized in-app charges by children. As we previously reported, in July, the FTC announced that it filed a complaint against Amazon.com, Inc. for failing to obtain the consent of parents or other account holders prior to billing them for in-app charges incurred by children. In January, the FTC announced a proposed settlement with Apple Inc. stemming from allegations that the company billed consumers for mobile app charges incurred by children without their parents’ consent. Apple agreed to pay a minimum of $32.5 million to provide refunds to consumers.

The agreement with Google is open for public comment until October 6, 2014.

Read more on the FTC’s Business Center and Consumer Information blogs.

Update: On December 5, 2014, the FTC approved the final settlement order with Google.