Internet Law

FTC sues Amazon, says it let kids make in-app purchases that ran up big bills for parents

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The Federal Trade Commission sued Amazon on Thursday. The agency contends that the online retail giant violated the Federal Trade Commission Act by allowing children playing games such as Angry Birds and Ice Age Village to make in-app purchases that ran up a big bill for their parents, without their parents’ knowledge or consent.

Individual charges ranged from 99 cents to $99 dollars, and collectively added up to millions, the FTC says. Although Amazon in 2012 began requiring a password to OK in-app purchases of over $20 and last year did so for purchases under $20, “what Amazon did not tell consumers is that entering a password would open a window of 15 minutes to an hour, in which children would rack up unlimited charges without parental involvement,” said Jessica Rich. She directs the FTC’s bureau of consumer protection.

The Los Angeles Times (sub. req.), Reuters, the Seattle Times and USA Today have stories.

The FTC provides a copy of the complaint (PDF), which was filed in federal court in Seattle and seeks permanent injunctive relief, consumer refunds and “the disgorgement of ill-gotten monies,” among other relief.

In a recent letter, Amazon told the FTC it had “effective” controls to prevent unauthorized charges to parents and gave a real-time notice whenever an in-app purchase was racked up, reports USA Today.

“We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn’t want we refunded those purchases,” said associate general counsel Andrew DeVore in the letter.

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