Make us your home page
Instagram

FTC sues Amazon over children's purchases without parental consent

SEATTLE — The Federal Trade Commission sued Amazon on Thursday for allowing children to make purchases within mobile applications even though the company knew that kids were doing so without parental permission.

The suit, filed in federal court in Seattle, alleges that the online retail giant knowingly allowed kids to run up "millions of dollars" of charges buying virtual items within the gaming apps such as "coins," "stars" and "acorns," all without parental involvement.

"Companies need to get consumers' consent before placing charges on their bills," said Jessica Rich, director of the agency's consumer protection bureau.

Amazon declined to comment on the suit, except to reiterate comments that its lawyer, Andrew C. DeVore, made in a letter to FTC Chairwoman Edith Ramirez last week. Then, DeVore disputed the claims and described litigation as "an unfortunate misallocation of the commission's resources."

The dispute stems from gaming apps that Amazon sells from its Appstore to consumers, who then play them on mobile phones or tablets. The apps, which target children, such as Pet Shop Story and Ice Age Village, aren't made by Amazon. But Amazon receives 30 percent of all revenue from in-app purchases.

When Amazon introduced in-app purchases in November 2011, it didn't require any passwords to make in-app purchases. Soon afterward, an Amazon Appstore manager described the level of complaints about unauthorized purchases as "near house on fire," according to the suit.

Amazon updated its policy in March 2012 to require authorization for in-app purchases over $20.

At the time, an Appstore manager wrote in an internal document obtained by the FTC that "it's much easier to get upset about Amazon letting your child purchase a $99 product without any password protection than a $20 product."

"Over time, Amazon changed its in-app charge process, but it did not fix the problem, and it was not transparent with consumers," Rich said.

Moreover, Rich said the refund policy for parents who complained about unauthorized purchases was "not adequate."

"The path to seeking a refund has been unclear and rife with deterrents, including statements that consumers cannot in fact get a refund for in-app charges," Rich said.

In its suit, the agency seeks refunds, not financial penalties.

FTC sues Amazon over children's purchases without parental consent 07/10/14 [Last modified: Thursday, July 10, 2014 6:20pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  2. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  3. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  4. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  5. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]