Amazon, not Google, next to face FTC's wrath over in-app purchases by children
The U.S. Federal Trade Commission on Thursday announced that it has filed suit against retail colossus Amazon, alleging that the company allowed children to rack up millions of dollars in unauthorized in-app purchases through the Amazon Appstore -- charges similar to those brought against Apple last year.
Federal regulators are asking the United States District Court for the Western District of Washington to issue an order directing Amazon to refund parents for unauthorized purchases and ban the company from allowing purchases without the parents' consent in the future. Amazon's conduct was particularly egregious, the commission believes, because internal emails show that Amazon employees knew of the problem but took only token steps to resolve it.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," FTC Chairwoman Edith Ramirez said in a release. "Even Amazon's own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."
At least one employee of Seattle, Wash.-based Amazon sent an email to colleagues in December 2011 saying that unauthorized in-app purchases were "clearly causing problems for a large percentage of our customers" before describing the situation as "near house on fire," according to the FTC complaint.
The company later altered the behavior of in-app purchases, requiring authorization for any transaction over $20. That seems to have done little to help matters, as another employee again used the "house on fire" metaphor when referring to customers' complaints in July 2012.
Amazon then changed its policies to match those agreed to by Apple in the iPhone maker's $32.5 million settlement with the commission, but the FTC says Amazon continues to refuse refunds and instead puts parents through a "refund process that is unclear and confusing." The commission approached Amazon with a settlement offer prior to filing suit, but Amazon instead chose litigation.
Along with refunds, the commission is also asking for "disgorgement of Amazon's ill-gotten gains."
Federal regulators are asking the United States District Court for the Western District of Washington to issue an order directing Amazon to refund parents for unauthorized purchases and ban the company from allowing purchases without the parents' consent in the future. Amazon's conduct was particularly egregious, the commission believes, because internal emails show that Amazon employees knew of the problem but took only token steps to resolve it.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," FTC Chairwoman Edith Ramirez said in a release. "Even Amazon's own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."
At least one employee of Seattle, Wash.-based Amazon sent an email to colleagues in December 2011 saying that unauthorized in-app purchases were "clearly causing problems for a large percentage of our customers" before describing the situation as "near house on fire," according to the FTC complaint.
The company later altered the behavior of in-app purchases, requiring authorization for any transaction over $20. That seems to have done little to help matters, as another employee again used the "house on fire" metaphor when referring to customers' complaints in July 2012.
Amazon then changed its policies to match those agreed to by Apple in the iPhone maker's $32.5 million settlement with the commission, but the FTC says Amazon continues to refuse refunds and instead puts parents through a "refund process that is unclear and confusing." The commission approached Amazon with a settlement offer prior to filing suit, but Amazon instead chose litigation.
Along with refunds, the commission is also asking for "disgorgement of Amazon's ill-gotten gains."
Comments
http://cdn0.vox-cdn.com/assets/4701794/AmazonFTC.pdf
http://www.theverge.com/2014/7/2/5864737/amazon-refuses-to-settle-with-ftc-in-app-purchases
I agree this law suit is an excuses for parents who for years used the TV as a replacement for interacting with their children. Now they use the iPad/iPhone as a replacement for them self. Those charges if you ask me are a just reward for neglectful parenting.
Some questionable supervision does not a bad parent make. I've taught my son to ask me first for any download he wants to get. He asks me even when it's free.
I think when we are talking about hundreds or thousands of dollars in charges that results in you contacting the FTC we have gone well beyond questionable supervision. These parents are not paying any attention to their children at all and handing them devices as baby sitters.
It is really odd that Apple, Amazon and I am sure eventually Google are being blamed for bad parents.
I might agree with you if this was about parents locking down their phones/tablets. It's not. This is about the failure of any of these platforms to provide an out-of-the-box working model for parental controls. "We've fixed it since" doesn't forgive the sins of the past:
http://www.theverge.com/2014/7/10/5887765/ftc-sues-amazon-for-letting-children-rack-up-in-app-purchase-bills
I know several parents who practice the "the babysitter is the tablet" principle, and I usually give them loads of crap for it, because an electronic device should NEVER be in that role for a child, EVER!
However...
I must also SMH at the apologists in here trying to place the blame solely on the parents for this. According to the article, it was discovered that Amazon staff KNEW this was a serious issue, yet deliberately took no decisive action to mitigate this. Apple was guilty of this as well. But when Apple was made aware of the issue, at least they took steps to perfect the system and make it much for difficult for these situations to occur, regardless of what steps were needed to make them get to that point. The funny thing is, Apple got sued a SECOND time, AFTER they had already complied with previous orders and finished enhancing the system.
Whereas Amazon, after being told about it, and offered a settlement, thumbed their noses not only at the regulatory agency, but at their own employees who were raising the alarms! This is completely inexcusable behaviour, and I hope they get the book thrown at them hard!
We, as parents, need to be MUCH more diligent about what we give our kids, and allow them to do. But at the same time, we also must hold the companies that makes these product and services accountable for their actions, or in this case, blatant inaction.
More money for the government to help close its budget gaps, Looks like they now using the DOJ office as a tax collector. yep they did not raise taxes they are just fining the money out of the companies bank accounts.
Well this teaching parents to be accountable as a parent and be responsible for what their kids are doing. Some when my kid throws a rock through someone window can I get the government to sue the window manufacturers for failing to make a window that did not break when my kids throw rocks at it.
The $32 millions Apple paid were refunds. It didn't go to the government. It seems Amazon don't want to refund that much money.
Do you have proof supporting that theory?
It didn't go to government coffers.
I thought Amazon and the US Government had..."an understanding." :wow:
I wonder if Google will get nabbed by the FTC but they'd actually have to sell things through their store to do anything wrong. Last I read, the Google Play store didn't do much business so there might not be anything the FTC can do about them.
Have you read anything about it in the last year?
Not a theory.. It's a fact. Check the link provided by Gatorguy.
Thanks for saving me the time ????