FTC commissioner says in-app purchase punishment against Apple 'has no foundation'
One member of the Federal Trade Commission believes the regulatory body's decision to slap Apple with a $32.5 million consent decree over accidental in-app purchases was without merit, and stated his case in a public dissenting opinion.
Source: FTC
In the dissent, which was issued alongside the FTC's own decision, Commissioner Joshua D. Wright echoed Apple chief Tim Cook's own conclusion that the Cupertino, Calif. company had already taken sufficient action --?instituting refunds and altering the behavior of in-app purchase prompts?-- to remedy any hardships caused by children's accidental purchases. The opinion was first spotted by Fortune's Philip Elmer-Dewitt.
"When the problem arose in late 2010, press reports indicate that Apple developed a strategy for addressing the problem in a way that it believed made sense, and it also refunded customers that reported unintended purchases," Wright wrote.
Given Apple's actions, the "commission has no foundation upon which to base a reasonable belief that consumers would be made better off if Apple modified its disclosures to confirm to the parameters of the consent order," he continued, adding that in "the absence of such evidence, enforcement action here is neither warranted nor in consumers' best interest."
Some believe that the commission's order was a political ploy, designed to gain accolades from the electorate at the expense of one of America's most important corporate citizens.
In a company-wide email preempting the FTC's Wednesday announcement of the consent decree, Cook told Apple employees that the order "smacked of double jeopardy" --?the company had already settled a class-action lawsuit over the matter with terms that essentially mirrored those of the consent decree. Apple would agree to the FTC's demands, Cook continued, because the decree "does not require us to do anything we weren't already going to do" and it would allow the company to avoid "a long and distracting legal fight."
In both cases, Apple agreed to offer full refunds to any affected families. The FTC's order, however, imposed a minimum penalty of $32.5 million, directing any portion of that amount not used for refunds to be turned over to the commission "for informational remedies regarding In-App Charges by children or consumer redress and any attendant expenses for the administration of any redress fund."
Source: FTC
In the dissent, which was issued alongside the FTC's own decision, Commissioner Joshua D. Wright echoed Apple chief Tim Cook's own conclusion that the Cupertino, Calif. company had already taken sufficient action --?instituting refunds and altering the behavior of in-app purchase prompts?-- to remedy any hardships caused by children's accidental purchases. The opinion was first spotted by Fortune's Philip Elmer-Dewitt.
"When the problem arose in late 2010, press reports indicate that Apple developed a strategy for addressing the problem in a way that it believed made sense, and it also refunded customers that reported unintended purchases," Wright wrote.
Given Apple's actions, the "commission has no foundation upon which to base a reasonable belief that consumers would be made better off if Apple modified its disclosures to confirm to the parameters of the consent order," he continued, adding that in "the absence of such evidence, enforcement action here is neither warranted nor in consumers' best interest."
Some believe that the commission's order was a political ploy, designed to gain accolades from the electorate at the expense of one of America's most important corporate citizens.
In a company-wide email preempting the FTC's Wednesday announcement of the consent decree, Cook told Apple employees that the order "smacked of double jeopardy" --?the company had already settled a class-action lawsuit over the matter with terms that essentially mirrored those of the consent decree. Apple would agree to the FTC's demands, Cook continued, because the decree "does not require us to do anything we weren't already going to do" and it would allow the company to avoid "a long and distracting legal fight."
In both cases, Apple agreed to offer full refunds to any affected families. The FTC's order, however, imposed a minimum penalty of $32.5 million, directing any portion of that amount not used for refunds to be turned over to the commission "for informational remedies regarding In-App Charges by children or consumer redress and any attendant expenses for the administration of any redress fund."
Comments
http://tech.fortune.cnn.com/2014/01/15/apple-ftc-kid-apps/
Note the last paragraph about law firm QE:
"Fun fact: Before she was appointed to the FTC, Chairwoman Ramirez was a partner in the Los Angeles office of Quinn Emanuel Urquhart & Sullivan."
Rattyuk's post on the article explains that:
"Let's spell it out. QE are both Samsung and Google's lawyers used extensively against Apple."
So the FTC chairwoman formerly worked for Samsung and Google? It's no smoking gun, but it makes you wonder about a bias or backroom nudge.
Yeah, right! Wanna bet not a single consumer see's the 'extra funds'?! Such bull.. It was a money and political grab.. Pure and simple..
Welcome to legal extortion by the US Government.
Fun Fact #2: FTC Chairwoman Ramirez worked for the law firm that leaked information during the Samsung trial and spread confidential contract information between Nokia and Apple and others to Samsung's top brass so it could be used when negotiating when Samsung negotiated with Nokia.
Ah, the beauty of the US Justice system.
Again, more potential evidence that it is all a "Hey, Apple has deep pockets, how do I get my "fair share"?"
If I was Apple? I'd find customers who haven't complained and refund them some IAPs until they hit that amount. Avoid this fake "fund"
I agree. Also good info from the posters there, including DeWitt.
Apple has always sent an email notification of purchases a day or two after. Why didn't the parents catch on? I think any parent who doesn't track their kid's activities should be liable because they're stupid "here you go son, here is my password, have fun duh." I get notified for each and every download even for free apps. If the email provided bounces, why is that the vendor's fault? Even after a post card was sent.
This administration and it's various arms is turning this country into a communist society. DOJ, FTC, activist jurists, FCC, etall.
That's an excellent point, these purchases could not have been done in secret, those notice emails would have been a warning within a day or two at most.
This administration and it's various arms is turning this country into a communist society. DOJ, FTC, activist jurists, FCC, etall.
Clearly some of our country's regulatory mechanisms are broken and need to be fixed. This is hardly just a problem of the present administration though -- things were far more screwed up and incompetent under Bush! But complaining about regulation in general is like saying the cells in our body should be free to do whatever they want. That's called cancer. We can't get rid of government, we have to make it work.
It just another way for our greedy politicians to grab more money from hard working citizens and businesses. While they wine and dine on our blood, sweat and tears. Get used to it people.
You're absolutely right lets start by removing the current administration
Question is why can everyone else do instantaneous emails and Apple takes at least a day. My son has done IAPs from Google, Microsoft (Xbox 360), Sony (PS3), and Apple, and in every case except Apple I've gotten the emails right away. Faster email could have prevented continued IAPs.
Why are you surprised that a money grab begat a money grab?
Question is why can everyone else do instantaneous emails and Apple takes at least a day. My son has done IAPs from Google, Microsoft (Xbox 360), Sony (PS3), and Apple, and in every case except Apple I've gotten the emails right away. Faster email could have prevented continued IAPs.
Good point. I've barely got the gas cap back on the car and AMEX has sent me a notice my card was just used, with the amount of the transaction and location etc. To APPLE Passbook.
Care to expand?
Because Apple handles purchases in batches. You wouldn't want a separate charge for each $0.99 track you purchase.
Many of IAPs are a pure money grab. Some games are so crippled that one cannot fully play the game without making some IAPs. How many here lauded how $. 99 games were trumping full price handheld console games but in reality those $. 99 games end up costing more than a full game on a handheld console. I personally got so tired of it that I took away my son's iPod Touch and got him a PS Vita. I'd much rather pay $15-20 once for a full game than much more over weeks and months in IAPs. Now I'm not blaming Apple, I'm blaming greedy devs, and unfortunately the job of reimbursing the users falls on Apple.