Google Will Pay At Least $19 Million to Settle In-App Purchase Dispute

By | 2 years ago 

An ongoing complaint from the Federal Trade Commission has ensured that the contentious matter of in-app purchases has been something of a thorn in the side of major app distribution services as well as a massive source of revenue. It’s a matter of whether or not customers are knowingly authorizing in-app purchases—and, for Google, that distinction has proven to be rather costly.

Last week, the FTC released a statement announcing that Google were to respond to a complaint filed by the commission earlier this year by issuing sweeping refunds to consumers. The terms described by the FTC are as follows:

Google Inc. has agreed to settle a Federal Trade Commission complaint alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices. Under the terms of the settlement, Google will provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers before charging them for items sold in mobile apps.

Similar complaints have also been lodged against Apple and Amazon, with the former agreeing to reimburse $32.5 million to customers last year, and the latter standing firm that the terms of its app store are made clear to consumers. Google have opted to nip the issue in the bud, not just by offering refunds but through changes made earlier this summer to the way games with in-app purchases are classified on their storefront.

Kim Kardashian 85 million mobile game header

Kim Kardashian: Hollywood is a hugely successful mobile game built around in-app purchases.

Titles like the ill-fated iOS version of Dungeon Keeper have given gamers plenty of reasons to be wary of in-app purchases in terms of the negative impact they can have on the quality of a game. However, a game like Kim Kardashian: Hollywood can show just how much money can be made from in-app purchases. It’s clear why this business practice is gaining traction, but at the same time it’s reassuring from a consumer perspective that the FTC is stamping down on purchases made in error or without the authorization of the bill-player.

In-app purchases may have once been restricted to the world of mobile gaming, but their impact is steadily being felt across the entire gaming landscape. Even a hugely successful console release like Grand Theft Auto V offers in-app purchases so that players can convert real money to in-game currency for use in its online mode. It’s a business model that shows no signs of stopping, even given the headaches that it has caused for some of the biggest names in tech.

Google will now begin the process of contacting customers who have made in-app purchases, informing them of the process to receive a refund for charges that were undertaken by children and unauthorized by the bill payer. If Google pay out less than $19 million over the course of a year, the remainder will be paid to the FTC for “use in providing additional remedies to consumers or for return to the U.S. Treasury.”

Source: Polygon