Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Personal Tech
Tame your scariest paperwork. Find Out How
Average Rating:
Rate this article:  
FTC Sues Amazon over In-App Purchases by Children
FTC Sues Amazon over In-App Purchases by Children

By Jef Cozza
July 11, 2014 10:56AM

    Bookmark and Share
Amazon changed its Appstore in March 2012 to require account owners to enter a password for in-app charges, but only for purchases above $20. The FTC said Amazon made another change in early 2013 that allowed children to make unlimited purchases for up to 15 minutes following an authorization for a single purchase by a parent.
 



The Federal Trade Commission filed suit Thursday against Amazon, alleging the retail giant made it too easy for minors to ring up millions of dollars in unauthorized in-app purchases. The suit, filed in the U.S. District Court of Western Washington, seeks refunds for parents whose children made purchases, and a court order that would require Amazon to get parental consent before future purchases.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," FTC Chairwoman Edith Ramirez said in a statement. "Even Amazon's own employees recognized the serious problem its process created."

'House on Fire'

According to the suit, Amazon began receiving complaints from parents just weeks after it began billing for in-app purchases. One Amazon Appstore manager described the number of complaints as being "near house on fire." As early as December 2011, the manager said the practice of allowing the charges to be made without any password was "clearly causing problems for a large percentage of our customers." Thousands of consumers eventually complained about the charges, the FTC said.

The Seattle-based company offers apps through its Appstore, a digital store preloaded on the Kindle Fire, which provide services such as the ability to watch TV shows, check the weather, or play games. Amazon receives 30 percent of the revenues from in-app purchases, which can range from $0.99 to $99.99, and can be incurred multiple times. Amazon also charges users for certain activities within the apps, including games that children may play.

The FTC complaint alleges that children are often encouraged to acquire virtual items within the games, with the difference between virtual currency and real money often blurred. In the app "Ice Age Village," for example, the complaint noted that children can use "coins" and "acorns" to buy items in the game without a real-money charge. However, they can also purchase additional "coins" and "acorns" using real money on a screen that is visually similar to the one that has no real-money charge.

Playing with Fire

Amazon eventually changed its Appstore in March 2012 to require account owners to enter a password for in-app charges, but only for purchases above $20. According to the FTC, the company made another update to its store in early 2013 which would allow children to make unlimited purchases within an app for up to 15 minutes following an authorization for a single purchase by a parent. Amazon only began to require informed consent for in-app purchases last month.

The commission said it received complaints that even children who could not read could rack up charges simply by hitting buttons at random, and one mother complained her daughter was able to incur almost $360 in unauthorized charges.

Andrew DeVore, Amazon vice president and associate general counsel, said in a letter to the FTC chairwoman that the company had refunded charges from complaining customers, and that it has included effective parental controls in the system since its launch.

"Pursuing litigation against a company whose practices were lawful from the outset…makes no sense," DeVore said.
 

Tell Us What You Think
Comment:

Name:





 Personal Tech
1.   OkCupid Experiments with Daters
2.   Verizon Throttling Data Speeds
3.   'Right To Be Forgotten': 26 Questions
4.   Civil War Battle Sites Get Mobile App
5.   Internet of Things Comes to DIYers


advertisement
Facebook Social Experiment Irks Us
Secretive test was legal, but ethical?
Average Rating:
OkCupid Experiments with Daters
Unethical without user consent?
Average Rating:
Protect Yourself from Identity Theft
Even if your data was compromised.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Canadian Government Charges China With Cyberattack
The government of Canada is not happy with China. Canadian officials have accused "a highly sophisticated Chinese state-sponsored actor" of launching a cyberattack on its National Research Council.
 
Researchers Working To Fix Tor Security Exploit
Developers for the Tor privacy browser are scrambling to fix a bug revealed Monday that researchers say could allow hackers, or government surveillance agencies, to track users online.
 
Wall Street Journal Hacked Again
Hacked again. That’s the story at the Wall Street Journal this week as the newspaper reports that the computer systems housing some of its news graphics were breached. Customers not affected -- yet.
 

Enterprise Hardware Spotlight
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Watson Gets His First Customer Service Gig
Since appearing on Jeopardy, IBM's Watson supercomputer has been making a living using his super-intelligent knowledge base for business verticals. Now, Watson's been hired for his first customer service job.
 
Tablet Giants Apple and Samsung Feel the Heat
When a company saturates its home market with a once-hot product, expect it to pump up efforts elsewhere. Apple, for its part, is now pushing iPads to big corporations and the enterprise market.
 

Mobile Technology Spotlight
Android 'Fake ID' Puts Millions of Users at Risk
Having this fake ID is nothing to brag about, even if you are a minor. The “Fake ID” Android flaw drops malware into smartphone apps. It can steal credit card data and even take over your device.
 
FTC Wants Fix for 'Perfect Scam' of Mobile Cramming
The U.S. Federal Trade Commission has issued new guidelines to curb “mobile cramming,” a troublesome practice that adds unauthorized third-party charges to mobile phone bills.
 
Facebook: You Will Use Messenger, and You Will Like It
Starting this week, Facebook users with Android and iOS phones will be forced to use the separate Messenger app to send Facebook messages. Pending messages will still be visible in the main app.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.