Google Agrees To Disclose Hidden Costs Of 'Free' Ringtones
Now, a search for "free ringtones" on Google returns sponsored listings with headlines like "complimentary ringtones," but with copy that includes phrases like "ad-supported or $9.99/month."
The deal was forged after six months of talks between the Florida authorities and Google, said Will Haselden, head of the cyberfraud division of the Florida Attorney General's economic fraud unit. "We figured you could represent $9.99 a month in seven or eight characters," he said. "We convinced Google that advertising wouldn't be markedly affected by putting that in there."
Google recently told advertisers the decision incorporated "concerns raised by users and discussions with the Florida Attorney General's office."
The Florida authorities have aggressively targeted a wide range of businesses involved with online ads that deceptively promise free ringtones. The authorities got involved after consumers complained that companies had tricked them into signing up for paid services by claiming that they offered "free" ringtones or other mobile content, while burying information about pricing in the fine print. People said they would click on the ads and then provide companies with their cell phone numbers without realizing that they were actually signing up for subscription services.
Last year, the Florida Attorney General's office extracted $2.5 million from AT&T, which also agreed to provide up to $10 million in rebates. AzoogleAds agreed to pay $1 million, as did Media Breakaway.
Haselden said the Florida authorities intend to ask other search engines, including Yahoo and MSN, to also require companies to reveal hidden costs of "free" ringtone deals.
This agreement with Google appears to mark the first time that the company has required marketers to include specific information in pay-per-click ads, according to search marketing consultant Greg Sterling. It's not clear that Google would have faced any legal liability if it had denied the Florida authorities' request. Late last year, a federal court dismissed a lawsuit against Google by a woman who alleged she was billed for a ringtone subscription after entering her cell phone number at a fraudulent site that she found via an AdWords ad.
In that case, U.S. District Court Judge Jeremy Fogel in San Jose ruled that the federal Communications Decency Act immunized Google from liability for pay-per-click ads created through AdWords.