Google reaches $19M settlement with FTC over in-app purchases

Google Inc. (GOOG) has agreed to pay $19 million to settle charges that the children were able to run up bills on Android mobile apps without their parents' permission, the U.S. Federal Trade Commission said on Thursday.

The FTC earlier this year settled a similar case with Apple Inc. for $32.5 million, and in July filed a complaint against Amazon Inc. making the same allegations. Google and Apple, as part of their settlements, agreed to change the way they bill consumers who use apps downloaded from their stores -- requiring approval from the account-holders before charging them.

Numerous consumers complained that they were faced with hundreds of dollars in charges from apps used by their children, who didn't realize they were spending real money.

"For millions of American families, smartphones and tablets have become a part of their daily lives," FTC Chairwoman Edith Ramirez said in a statement. "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."

Google is required under the settlement to contact all of its customers who had in-app charges and explain the refund process for those that were incurred by children. The notification has to be sent with 15 days of the settlement being approved. If Google doesn't disburse the entire $19 million within the year, the balance goes to the federal government, the FTC said.

With the announcement of the settlement, Google issued this statement:

"We've already made product changes to ensure people have the best Google Play experience possible. We're glad to put this matter behind us so we can focus on creating more ways for people to enjoy all the entertainment they love."

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.