FTC Files Legal Complaint against Amazon for Accidental In-App Purchases
If you are using Amazon Kindle and you happen to make a purchase at the Amazon Appstore, you may notice that the transaction would require passwords to proceed. This makes in-app purchases safer. However, you should be aware that it took a couple of years before the measure was implemented.
In-app purchases in the Amazon Appstore started in 2011, when it was still in a beta program. During its start, the platform did not require passwords for in-app purchases.
By December 2011, internal communications within Amazon indicated that the lack of any password requirement prior to in-app purchases was already a cause of issues to a significant number of their customers. It was then that the company moved to make the necessary change.
It was in March 2012 when Amazon Appstore’s policy was updated to make requirements for passwords necessary before proceeding to an in-app purchase. The password would be required in transactions greater than $20. But in early 2013, unauthorized purchases were still a problem when it took 15 minutes before passwords were transacted. That was again improved in June 2014.
The Federal Trade Commission (FTC) has recently filed a suit against Amazon for the company to refund its customers, who were affected by the lack of passwords in in-app purchases before. At the same time, the regulator wants the company to forfeit any amount that it generated on those unauthorized purchase transactions. This may possibly translate to millions of dollars in charges.
In a statement, FTC said the in-app system of the company had allowed children to make unlimited and unnecessary charges on their parents’ Amazon accounts without full knowledge and consent. The agency said that children who borrow Kindle Fire of their parents might have made in-app purchases also without their knowledge. And since passwords were not required for some time, unnecessary charges were incurred and collected.
Following a precedence
For its part, Amazon said it was surprised with the FTC’s move. The company said it had already attended constructive meetings with the regulator in the past weeks. Amazon thought those meetings could help prevent the filing of such a complaint.
FTC said it would also apply to Amazon what it did to Apple Inc. In January, Apple agreed to pay $32.5 million to settle a lawsuit filed by the agency. FTC also sued Apple for the unauthorized in-app purchases made on Apple devices.