Google is to pay at least $19m (£11.6m) to settle a formal complaint over unauthorised in-app purchases.
The complaint came from the US Federal Trade Commission (FTC) which said Google should do more to warn people about how much they were spending.
Most of the purchases were made by children keen to advance in popular smartphone games.
The settlement requires Google to tell all those who made in-app purchases about how to get a refund.
In a statement, the FTC said that Google broke its prohibition on unfair commercial practices because it took payments from parents for charges incurred by their children.
"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 authorise," said FTC chairwoman Edith Ramirez.
Some families faced paying hundreds of dollars for items bought by their children, said the FTC.
The FTC added that although Google has changed its in-app payment policies from the early days when no verification was required, it was still not doing enough to let people know how much they would be paying.
In a statement, Google said it had already made further changes to improve the way people are told about the purchases they make. The FTC settlement demands that people give explicit, informed permission for payments.
"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," Google added. The settlement only covers payments made via the US Google Play store.
Google is not the first to settle a complaint relating to mobile payments. In January 2014, Apple settled a similar complaint over in-app purchases made through apps downloaded from its software store.
Apple's settlement involved repaying $31.5m to those who incurred unexpected bills.
The FTC has also sued Amazon over unauthorised in-app purchases made by children using apps from its Android store. Rather than settle, Amazon has said it will fight the charges.