Amazon hit with lawsuit over kids in-app purchases

Devices Michael Moore

10:01, July 11 2014


Federal Trade Commission says retailer didn’t do enough to stop chances of unauthorised bills.

Online retail behemoth Amazon is being sued by a major American regulator over claims that it doesn't do enough to prevent children from unwittingly making in-app purchases through its mobile app store.

The US Federal Trade Commission (FTC) announced it was suing Amazon to seek refunds for the parents of children who had run up major bills through the company's Kindle app store, as well as looking to enforce tighter controls on the marketplace in the future.

The FTC says the amount of unauthorised purchases could run into the millions of dollars.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," FTC chair Edith Ramirez said in a statement.

"Even Amazon's own employees recognized the serious problem its process created," she added.

Amazon introduced in-app charges to the Amazon Appstore in November 2011, but did not include any password authorisation requirements of any kind on in-app charges, including in games and other apps targeted at children, leaving some parents facing huge bills.

The FTC complaint cited the example of a game called "Ice Age Village", where children can purchase "coins" and "acorns" using real money on a screen that is visually similar to one that has no real-money charge, with the largest quantity purchase available costing $99.99.

Such games "encourage children to acquire virtual items in ways that blur the lines between what costs virtual currency and what costs real money," the complaint stated.

Amazon reportedly rejected a settlement offer from the FTC, with a company spokesperson citing a letter it sent the regulator earlier this month in which it accused the FTC of acting on double standards following a similar case it pursued against Apple earlier this year.
The company said that it was "deeply disappointed" by the FTC's demands.

"The [FTC]'s unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court," it added.

Following an FTC probe earlier this year, Apple offered refunds of up to $32.5m (£19m) to parents who had suffered unauthorised charges, and promised to change its billing practices to prevent similar events happening in the future.


Source: Company Press Release

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