Feds Crack Down on Google Over Kids’ App Spending

The company will pay $19 million for failing to stop children’s spending sprees.

A sign is posted on the exterior of Google headquarters on January 30, 2014 in Mountain View, California.  
National Journal
Brendan Sasso
Add to Briefcase
Brendan Sasso
Sept. 4, 2014, 8:30 a.m.

Google is the latest com­pany to face fed­er­al charges for fail­ing to pre­vent chil­dren from rack­ing up big bills for their par­ents.

The com­pany agreed Thursday to re­fund at least $19 mil­lion to con­sumers to settle a case with the Fed­er­al Trade Com­mis­sion.

Ac­cord­ing to the agency, Google un­fairly billed con­sumers whose chil­dren made un­au­thor­ized pur­chases us­ing mo­bile apps down­loaded from the Google Play store. The in-app pur­chases for vir­tu­al items could range from 99 cents to $200. Google failed to prop­erly ob­tain the con­sent of the ac­count hold­er be­fore com­plet­ing the pur­chases, the FTC said.

In-app pur­chases are a re­l­at­ively new fea­ture, but have be­come a big source of rev­en­ue. For­cing com­pan­ies to step up pro­tec­tions against un­wanted pur­chases has been a ma­jor fo­cus for the FTC this year. Apple already agreed to a $32.5 mil­lion set­tle­ment with the FTC, while Amazon plans to fight the charges in court.

“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,” FTC Chair­wo­man Edith Ramirez said in a state­ment.

Ac­cord­ing to the com­plaint, Google al­lowed users to make in-app pur­chases without any pass­word au­thor­iz­a­tion in 2011. In 2012, Google in­tro­duced a pop-up pass­word win­dow, the FTC said, but it did not in­clude in­form­a­tion about the ac­tu­al pur­chase.

Google em­ploy­ees in­tern­ally re­ferred to the chil­dren’s pur­chases as “friendly fraud” and “fam­ily fraud,” the FTC dis­covered.

In a state­ment, Google said it has already made changes to pre­vent sim­il­ar prob­lems in the fu­ture.

“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,” the com­pany said.

Apple, which settled its case with the FTC in Janu­ary, re­portedly egged on the FTC to sue Google. Ac­cord­ing to Politico, Apple gen­er­al coun­sel Bruce Sewell sent an email to FTC Chair­wo­man Edith Ramirez, say­ing a news art­icle about un­au­thor­ized pur­chases on Google An­droid devices “might be of some in­terest.”

What We're Following See More »
AND POLICE OFFICERS IN EVERY SCHOOL
Gov. Scott Wants to Raise Gun-Purchase Age to 21
17 hours ago
THE LATEST
IN THE WAKE OF NEW CHARGES
Gates Expected to Plead Guilty, Cooperate with Mueller
18 hours ago
THE LATEST

Former Trump campaign adviser Rick Gates is expected to plead guilty to a raft of new tax and fraud charges filed against him by special counsel Robert Mueller on Thursday. Gates is expected to cooperate with Mueller's investigation.

Source:
32 COUNTS
Mueller Hits Manafort, Gates with New Charges
1 days ago
THE LATEST

Robert Mueller announced new charges against former Trump campaign chairman Paul Manafort advisor Rick Gates. "The new indictment contains 32 counts, including tax charges." The pair had been indicted on 12 charges in October. Since then, Gates's attorneys have asked to be excused from the case.

Source:
SECOND TIME FBI FAILED TO ACT
FBI Failed To Act On Parkland Shooter Tip
1 days ago
THE DETAILS

The FBI has reported that it failed to respond to a warning from "a person close to" Nikolas Cruz, the teen accused of killing 17 people at Parkland High School on Thursday. "It was the second time the FBI apparently failed to follow up on Cruz." On the first occasion, it failed to properly investigate Cruz after it was reported to them that he left the following comment on a Youtube video: "Im going to be a school shooter."

Source:
FBI MISSED TIP ON PARKLAND SHOOTER
Florida Governor Calls on FBI Director to Resign
1 days ago
THE DETAILS

Florida Governor Rick Scott called on FBI Director Christopher Wray to resign following revelations that the FBI had failed to adequately investigate multiple warnings about Parkland High School gunman Nikolas Cruz. “The FBI’s failure to take action against this killer is unacceptable,'" said Scott. '...We constantly promote ‘see something, say something,’ and a courageous person did just that to the FBI. And the FBI failed to act.'" According to an FBI statement, the FBI failed to inform local offices of information regarding "Cruz's desire to kill people, erratic behavior, disturbing social media posts, as well as the potential of him conducting a school shooting."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login