Google Inc. (NASDAQ:GOOG) recently ran into trouble when it began to charge parents for their children’s in-app purchases. Many complaints were filed against by parents who were at the receiving end of this issue.
The Federal Trade Commission stepped in after receiving a large number of complaints for in-app purchases. A settlement agreement was reached between Google and FTC according to which Google was asked to refund the purchases; the refund amount totaled up to $19 million. Google was also asked to update the in-app purchase system in order to avoid future complications.
Niki Christoff, Google’s spokesperson said that the company has already taken action and incorporated the necessary changes into its purchase procedure. Google will ask for consent numerous times before a transaction takes place.
Google was accused by the Federal Trade Commission that charging the parents for in-app purchases by children was unfair. To this allegation Google replied that it does not hold the reputation of a swindling company and that it will do everything possible to rectify the error. Google further said that Google Play always emphasizes on entertainment factor and its priority is to deliver the best possible experience for its user.
Google has a lot riding on these purchases and luckily for the company its users happily invest in apps and games, especially the youth. A significant part of Google’s revenue comes from in-app purchases.
Apple Inc. (NASDAQ:AAPL) and Amazon also faced similar situation. Apple Inc. settled the predicament by paying a hefty amount of $32.5 million to reimburse “the parents”. Amazon however plans to fight the case.
This is not the only allegation Google has to face. According to recent reports Google has been asked to make a few more concessions by anti-trust regulators from the European Union.
The demands were made after a few companies gave not-so-positive feedback to Google. These companies requested EU to launch investigations about how Google manages its search results. Among these companies are a few big names that include Expedia and Microsoft. According to the allegations made, Google search results are not fair to its competitors.
The European Commission will reopen the antitrust investigation that has a life-span of four years. It will investigate Google’s advertising and search business. There is also a possibility that a new investigation will start for Google’s Android operating system.
According to antitrust chief of EC Joaquin Almunia, the recent complaints pointed at some new issues regarding new data which raised new concerns. Therefore EU is left with no choice but to reopen the case and evaluate the issue. He believes the investigation will be a complex and long one.
This investigation against Google started back in 2010. The basic purpose of these investigations was to determine if Google’s supremacy in advertising and search market in Europe needed monitoring and regulation.
Alumina who has been looking after the case from the start, identified 4 major concern areas in Google’s business. Two of these areas have been resolved whereas one area related to vertical search has raised quite a few eyebrows.
It seems that Google Inc.’s (NASDAQ:GOOGL) legal team has its work cut out, which is not a surprise because companies of Google’s stature can expect legal issues to surface on a regular basis. The question of who is actually responsible for these purchases is still up for debate. Should the parents or companies (Apple Inc. & Google Inc.) be held responsible for in-app purchases?
