(Adds comment from FTC Chairwoman Edith Ramirez, share price,
By Diane Bartz
WASHINGTON, Sept 4 Google Inc has
agreed to refund at least $19 million to parents who were
unfairly billed for charges racked up by children playing video
games such as Ice Age Village and Air Penguins on smartphones
Children sometimes put hundreds of dollars on their parents'
credit cards without permission and thousands of complaints were
made, the U.S. Federal Trade Commission said on Thursday in
announcing the settlement.
The agreement was similar to a $32.5 million settlement
reached with Apple Inc in January.
The FTC said Google had also agreed to change its billing
practices to ensure that parents know, and agree to, purchases
that their children make.
Google said that it implemented changes in March 2014 that
made it clearer when real - as opposed to virtual - money was
being spent. And it said that it allowed consumers to choose
whether they wanted to be prompted to enter a password with each
purchase, as a way to head off unauthorized charges by children.
"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," said a Google spokeswoman.
In the Apple settlement, it agreed to refund to customers at
least $32.5 million in unauthorized charges made by children and
to change its billing practices to require consent from parents
for in-app spending.
The commission sued Amazon.com in July on the same
The FTC has alleged that the companies were too lax in
allowing children playing some app games to ring up charges on
their parents' credit cards to buy pricey digital goods.
In the game Air Penguins, for example, children can buy
virtual fish costing $49.99 to feed virtual penguins living on
virtual melting ice caps.
"Children could rack up charges just by tapping on pop-up
boxes," said FTC Chairwoman Edith Ramirez, adding that Google's
staff pointed to what they called "family fraud" or "friendly
fraud" as a leading source of refund requests.
Google first began offering in-app charges, as the virtual
purchases are known, in 2011 without requiring any password or
taking other steps to ensure that the parent approved of the
child's charges, the FTC said.
In 2012, Google began asking for the credit card holder's
password before allowing the purchase. But, granting permission
for one purchase would open a 30-minute window where children
could make purchases without re-entering a password, the FTC
Initially, Google urged unhappy parents to take up the issue
with the app developer, the FTC said.
Google shares were about 1 percent higher in afternoon
trading on Thursday.
(Reporting by Diane Bartz; Editing by Ros Krasny, Mohammad
Zargham and Cynthia Osterman)