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March 11, 2014

First Apple, now Google hit with kids' app lawsuit

Last month, 4- and 5-year-old brothers in New York quickly spent $65.95 in real money to buy virtual goods in Marvel's Run Jump Splash game on the family tablet. They were able to rack up the charges without entering a password. And for that, the boys' mother has joined a class-action lawsuit filed Tuesday against Google, accusing the company of deceiving consumers about its in-app purchase system, which critics say makes it too easy for kids to spend money on their Android devices.

The case mirrors a class-action suit and Federal Trade Commission action against Apple for similar practices that had consumers decrying hundreds of dollars in surprise and unwanted in-app charges on games targeted toward children. The new suit also begs the question of why Google, seeing Apple's three-year-long public relations and legal headache over the issue, didn't follow Apple in strengthening billing protections for families. In 2012, Apple changed its in-app purchase system so that a password has to be entered every time a user wants to buy virtual currency or goods in an app.

Now, parents want Google to close its 30-minute window for unlimited purchases within an app and are seeking at least $5 million in damages. Google, which operates the Android Google Play app store, declined to comment on the suit.

Lawyers for more than 100 parents in the class-action suit say that by allowing kids to purchase goods online and without a password, Google Play took advantage of young children who won't exercise the same financial judgment as adults. Children may not fully understand that when they buy a virtual gold coin, fruit or crystal to advance levels in a game, their parents will be billed for the charges.

The suit, filed in the U.S. District Court of the District of Northern California, alleges that Google designed its in-app purchase system in a way that targets children. Popular apps such as Pet Hotel are free on Google Play and earn money through in-app purchases.

"A parents could enter his or her password to permit a child to download a free gaming App, and then allow the child to download and play the game," plaintiffs said in the suit. "What Google did not tell parents, however, is that their children [were] then able to purchase (virtual) currency for 30 minutes without any supervision, oversight or authorization."

In January, the FTC sought $32.5 million in a settlement with Apple over its in-app purchases. The federal agency would not comment on Google's practices, but European Commission regulators said last month that they would investigate complaints of Google's in-app practices.

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