Google has agreed with the Federal Trade Commission to pay at least $19 million in refunds to customers whose children made in-app purchases without their permission.
The tech company also agreed to change its billing practices in order to ensure that consent is obtained from customers before they're charged for items sold within apps.
"We've already made product changes to ensure people have the best Google Play experience possible," said a Google spokesperson. "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."
According to the FTC, Google has violated U.S. law which prohibits "unfair" commercial practices by billing customers for purchases their children made within apps. Some customers reported being billed hundreds of dollars.
"For millions of American families, smartphones and tablets have become a part of their daily lives," said FTC Chairwoman Edith Ramirez. "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."
When in-app purchases were introduced in 2011, Google did not require users to enter any passwords or verify their identity during the purchase process. Because of this, children were able to make as many in-app purchases as they wanted by clicking on pop-up windows.
It was not until a year later, in mid- to late-2012, that Google began asking customers to verify their identity within apps while making purchases. Despite this, Google did not inform users that the authorization opened up a 30-minute window for in-app purchases that did not require authentication.
Google is not the first company to have to pay up in refunds for in-app purchases made by children. Apple was hit with a similar lawsuit earlier this year in which the company agreed to pay at least $32.5 million in refunds from in-app purchases made through Apple's iOS App Store.
Amazon is also in hot water surrounding unauthorized in-app purchases, however the company has so far refused to settle.
Google will now have to contact all consumers using the Google Play Store and inform them of the refund process. If the company does not reach the $19 million that it is required to pay out, it will pay the difference to the FTC for official use and the benefit of the customers.
Google also recently agreed to stop listing apps with in-app purchases as "free" and instead tells customers that the app may require in-app purchases.
