Apple hit with class-action suit over iPhone in-app game currency purchases
A new class-action lawsuit takes issue with free iPhone games that feature in-app purchases, alleging that Apple's App Store makes it easy for children to rack up credit card charges without realizing they are spending real-world money.
Garen Meguerian of Phoenixville, Penn., filed the suit this week on behalf of himself and other parents and guardians who he believes incurred unauthorized charges for game-related content. Those transactions came from children playing games on iOS devices like the iPhone, iPod touch and iPad, and making in-app transactions to purchase virtual goods.
Meguerian has two daughters, ages 12 and 9. He says that his youngest daughter was allowed to download a number of free games from the App Store, including "Zombie Cafe," "Treasure Story" and "City Story."
Though Meguerian allowed his daughter to download the free games, he said he had no idea that those games included virtual currency that could be purchased via real credit card transactions. Meguerian said his daughter's purchases of "Zombie Toxin," "Gems" and "City Cash" in free iPhone games cost him about $200.
The lawsuit notes that Apple has since addressed the issue by requiring a password for in-app purchases. Previously, once users entered their password to download an application, iOS offered a 15-minute window during which additional purchases could be made without entering the password.
But Meguerian believes that Apple's previous policy allowed the company to "pocket millions of dollars" from unauthorized transactions. And even the revised password policy found in iOS 4.3 isn't enough, he argued.
"Because the passwords now required for purchases of Game Currency are the same passwords required for any Apple purchase, minors aware of such password may purchase Game Currency without authorization from their parents for that purchase," the lawsuit reads.
The complaint also notes that the U.S. Federal Trade Commission in February decided to investigate Apple for its in-app purchase system. One popular title geared toward children that has been repeatedly cited is "Smurfs' Village" from Capcom, in which users can purchase 50 "Smurfberries" for $4.99, or 1,000 for $59.
Meguerian's lawsuit cites the title "Smurfs' Village" as relying on a "bait-and-switch business scheme." Other games mentioned in the suit are "Bakery Story," "Tap Zoo," "Tap Fish," "Glass Tower," "Sundae Maker," and "Cake Maker."
The complaint, filed in U.S. District Court in the Northern District of California, seeks damages and attorney's fees for the plaintiff and all others in the class.
Garen Meguerian of Phoenixville, Penn., filed the suit this week on behalf of himself and other parents and guardians who he believes incurred unauthorized charges for game-related content. Those transactions came from children playing games on iOS devices like the iPhone, iPod touch and iPad, and making in-app transactions to purchase virtual goods.
Meguerian has two daughters, ages 12 and 9. He says that his youngest daughter was allowed to download a number of free games from the App Store, including "Zombie Cafe," "Treasure Story" and "City Story."
Though Meguerian allowed his daughter to download the free games, he said he had no idea that those games included virtual currency that could be purchased via real credit card transactions. Meguerian said his daughter's purchases of "Zombie Toxin," "Gems" and "City Cash" in free iPhone games cost him about $200.
The lawsuit notes that Apple has since addressed the issue by requiring a password for in-app purchases. Previously, once users entered their password to download an application, iOS offered a 15-minute window during which additional purchases could be made without entering the password.
But Meguerian believes that Apple's previous policy allowed the company to "pocket millions of dollars" from unauthorized transactions. And even the revised password policy found in iOS 4.3 isn't enough, he argued.
"Because the passwords now required for purchases of Game Currency are the same passwords required for any Apple purchase, minors aware of such password may purchase Game Currency without authorization from their parents for that purchase," the lawsuit reads.
The complaint also notes that the U.S. Federal Trade Commission in February decided to investigate Apple for its in-app purchase system. One popular title geared toward children that has been repeatedly cited is "Smurfs' Village" from Capcom, in which users can purchase 50 "Smurfberries" for $4.99, or 1,000 for $59.
Meguerian's lawsuit cites the title "Smurfs' Village" as relying on a "bait-and-switch business scheme." Other games mentioned in the suit are "Bakery Story," "Tap Zoo," "Tap Fish," "Glass Tower," "Sundae Maker," and "Cake Maker."
The complaint, filed in U.S. District Court in the Northern District of California, seeks damages and attorney's fees for the plaintiff and all others in the class.
Comments
On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.
There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.
I am suing because I cannot control my kids.
"My iPhone is my child's babysitter but I don't have enough time to pay attention to what they are doing on it."
I do agree that free games were free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?
On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.
There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.
I agree on all points. The false argument a game is 'free' when it has costs built in once bought is the key to this I think.
Those games should not be included in the free games section. Apple could easily make a definition of a 'free' game or app that stated it may contain ads but no in app sales. Even an upgrade from a light to a full version should not be from within a 'free app' rather an ad would state it has to be 'purchased from the non-free section.
Those apps or games that use the business model 'give it for free' and 'make the money from add ons' is perfectly legitimate but it should not masquerade as free, especially when targeted at kids.
Having said that parents still need to take responsibility here and not resort to suing Apple.
why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.
Ah, a sensible parent.
I do agree that free games were free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?
Apple isn't making anyone charge for free games. (In fact, I think that was your idea...
On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.
Yeah, but it doesn't take a whole lot of tech savvy to not give your kids the password to your credit-card connected account. That is a separate issue from handling parental controls...
There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.
They. Already. Did.
The changes they made were sufficient. If parents are gving kids access to their passwords, then they can't reasonably go crazy about kids racking up in-app purchases without also being concerned about racking up new app purchases.
What would their solution be? Require retina scans for any purchase?
why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.
Mine has my password but still have to ask. It would be too much of a pain to have to enter the password each time they want to download a free app. They both have purchased stuff accidentally (or so I choose to believe) but nothing major. For a kid to rack up $200's worth before the parent receives an invoice from iTunes, the child must have been on a mission, or else the parent was not checking his or her iTunes receipt emails (sometimes arrive days after the purchase). It's tempting to blame bad parenting but I gave up blaming parents for anything the day I go my own kids. Parenting is complicated and everybody has issues of one sort or another. It would be a very sensible move for Apple to offer the holder of an iTunes account the option of a secondary password for in app purchases.
What would their solution be? Require retina scans for any purchase?
Now there's an idea! There should be an app for that!
I do agree that free games should be free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?
I play many of these free games (Storm8 games, Lil' Pirates) and have for well over a year and I have spent nothing on any of them. They are very playable without buying in-App currency. All it allows you to do is quicken the pace and/or buy optional crap like costumes. iOS has parental restrictions for stuff like this and why would this idiot father give his kids his iTunes password. Why doesn't he give them his ATM PIN number too?
iTunes already has an "allowance" system built in for the kiddies. There is absolutely no reason to provide kids with a password that accesses the Credit Card.
Not having kids I didn't know that. That is so obviously the answer.
.... and why would this idiot father give his kids his iTunes password. Why doesn't he give them his ATM PIN number too?
I think the original story specified "daughter", so he probably already has turned over his ATM PIN.
c
in app purchases are just a bad bad, evil idea. f*** zynga and all imitators.
c
Evil? Maybe but a necessary one. How else are they supposed to make money? There's just not enough to be made from ads. The screen's only so big and I don't want intrusive ads taking up precious screen real estate.
Besides, there is an iOS restriction that allows complete disabling of in-App purchases. Why has this "father" not set restrictions on their iDevice? Would he sue the Internet if his kids browsed porn on his probably unrestricted computer?
why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.
Did you actually read the article? It's not about giving kids a password, it's about the previous iTunes/App Store set up that allowed further purchases within a fifteen minute time frame, including in-app purchases. Kids don't need a password for that. Have dad download the game, start playing, and stumble on an in-app purchase - and then there's nothing blocking the kid from just going ahead with the purchase. I doubt the kids even realized it cost anything. Now you can't do that, it forces you to input your password again.
Apple should have seen this coming. In-app purchases were ripe for this kind of problem from the start. I won't say they were hoping to reap the rewards of accidental purchases, but surely they saw the problem early and could have updated iOS to stop this long ago. I do think, however, that these lawsuits are pretty frivolous - we're talking a couple hundred dollars and a problem that has been solved. There is no real reason to go ahead with this other than greed, IMO.