Amazon Held Liable for Billing Kids’ In-App Purchases
Amazon was held liable by the federal court for illegally billing parents whose kids had made some in-app purchases without their consent. The federal judge ruled in favor of the Federal Trade Commission, agreeing with the fact that Amazon had failed to explicitly clarify that the apps which are labeled “free” may become chargeable after a certain point.Advertisement
The Verge reported saying that the case will now continue between FTC and Amazon until they reach some form of mutual settlement. However, reaching a settlement might take some time as FTC is geared up for extracting maximum damages, taking into account damages incurred by purchases made by kids starting all the way back to 2011, when the app was launched. It was only on June 2014 that Amazon decided to update its terms and conditions, including detailed disclosures and prompts.
“The millions of dollars billed to Amazon customers without a mechanism for consent, the thousands of customers complaining about unauthorized charges, and the time spent seeking refunds for those charges, all demonstrate substantial injury,” John Coughenour, The U.S. District Judge wrote. The judge further added that 1,573 customers who had filed a claim for refunds from Amazon had not yet received them.
According to Reuters, the head of Amazon’s AppStore, Aaron Rubenson, had admitted in his LinkedIn profile that the increasing complaints from customers regarding Kids’ in-app purchases were “near house on fire” and “We’re clearly causing problems for a large percentage of our customers.”
Similar cases were filed by FTC against Google and Apple in 2014, where the companies ended up paying $19 million and $32.5 million in damages respectively. Amazon has reportedly profited around $86 million from the unwitting purchases made by the kids through the presumably free apps, while it had paid back a mere $10 million in refunds, disclosed JulieMiller, FTC data analyst.
Amazon was unavailable for any comment regarding the matter when contacted.
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