The Inquirer-Home

Apple will cough up $32.5m to settle FTC in-app payments case

Parents lost money their children spent
Thu Jan 16 2014, 10:51

GADGET DESIGNER Apple will pay $32.5m, or about £20m, to parents whose children made in-app purchases without their explicit consent.

The US Federal Trade Commission said that Apple has agreed to pay full refunds to people who didn't keep lock down their in-app payment settings with gadgets in the hands of their kids.

"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," said FTC Chairwoman Edith Ramirez. "You cannot charge consumers for purchases they did not authorize."

The settlement relates to a time when inserting your Apple password would open a 15 minute window of in-app spending opportunity. Apple has since changed this, and users are expected to enter their password each time they spend some money on crap.

Back then, though, you could enter your password once, pass a smartphone to a child, and watch as your chance of ever getting a mortgage was digitally defenestrated.

This happened to the tune of $32.5m or more, said the FTC, which has heard of incidents where children spent almost £2,000 in just 15 minutes. In all, it said, Apple received tens of thousands of complaints about such inappropriate in-app purchases.

$32.5m sounds like a lot, but Apple recently said that its customers spent over $10bn in its App Store last year, adding that developers have earned $15bn to date.

As well as paying the fine the firm must also make a few changes to its billing practices. The FTC also insisted that Apple pay the full $32.5m as soon as is possible.

Apple has not yet responded to our request for comment, but the website 9 to 5 Mac has a copy of an internal email sent by Apple CEO Tim Cook.

In his email Cook said that the FTC has moved in the same direction as Apple, and added that there was no good reason to contest the settlement. µ


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