Amazon and the Federal Trade Commission (FTC) have agreed to drop all ongoing litigation, paving the way for Amazon to refund over $70 million to customers whose kids made unauthorized in-app purchases.
The legal dispute between the two started in 2014 when the FTC filed a complaint against Amazon for failing to obtain parental consent for in-app charges made by kids via apps distributed via the Amazon App Store.
The FTC called this "unlawful billing" and filed an official complaint in July 2014, which it won in April 2016, when a federal court ordered Amazon to pay over $70 million representing unauthorized in-app charges incurred by children between November 2011 and May 2016.
Amazon and FTC agree to drop ongoing litigation
Besides the refund, the court also denied the FTC's request for an injunction that would have forbidden Amazon from engaging in a similar practice in the future. Amazon appealed the ruling, while the FTC appealed the court's decision to deny the injunction.
Now, one year later, the two sides agreed to drop their appeals, effectively agreeing to the court's original decision, meaning Amazon will have to start refunding parents for any unauthorized charges.
Amazon promised to publish details about its upcoming refund program in the following days.
Similar FTC complaints targeted Apple and Google
The FTC won similar cases against Apple and Google in January 2014, and September 2014, respectively. Apple agreed to refund over $32.5 million, and Google to $19 million.
Unauthorized in-app charges happen because many apps are offered as free downloads, but offer in-app charges while kids are playing the game.
Without prior warning, parents that install these apps on their kids' phones and tablets have no clue of the financial risks they're exposing themselves to. There have been many cases reported in the media where kids racked up bills of tens of thousands of dollars just by playing a game [1, 2, 3].
Comments
Allen - 7 years ago
70 million huh? Kinda overkill if you ask me, I mean don't the parents take some blame here for allowing their children to have access to accounts with their credit cards saved?
If we're going down that route, what about the app developers? They're the ones making these so called "free" (oh but if you want to win, you have to pay for upgrades & stuff) games, shouldn't these guys be the ones paying the parents back?
Don't get me wrong, if Amazon doesn't have any measure in place to stop this kind of issue, then yeah they are kinda at fault here as well, that being said if it's that big of an issue why even let your kids play these apps/games in the first place?
Honestly just blaming one single side in this case is extremely ignorant, all sides in this situation are to blame:
1. Amazon needs to introduce a method of approving purchases in apps (send a text with a code or something to your phone so that you have to enter it before the purchase goes through)
2. Parents should be more vigilant and keep an eye on what their children are doing with their iPads and tablets and phones (Hey remember when kids didn't need phones at a young age?), as well how about less time on tablets and phones and maybe more time outside getting exercise?
3. App developers should set a fixed limit on how much money you can spend on an app in a day or so, being able to rack up $3000 in charges for a single app in less than a day is downright ridiculous.
*sigh* I think that's enough ranting for one day.
DodoIso - 7 years ago
Those big companies should facilitate the creation of accounts that don't require a credit card number. That would help tremendously. If not, it's the entire fault of those big companies.