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The FTC Files Suit Against Amazon Over In-App Purchases Amounting Million Of Dollars

July 10, 2014 - Written By Justin Diaz

Yesterday we reported that Google could be on the FTC’s radar Over in-app purchases, after Apple had been attempting to point the finger at them due to angry parents with kids that spent their hard earned money on those apparently easy to obtain IAP’s. We also mentioned that they were currently looking in Amazon’s direction but that Amazon was not afraid to take things to court over the matter to avoid FTC restrictions, and that they have always made it easy for parents to requests refunds for such incidences and that all they would need to do is ask. It seems like Amazon is getting their wish and will be preparing themselves for a battle in court, as reports are stating the FTC has just filed a lawsuit against Amazon over this issue.

It’s quite funny and ironic that these problems come up, when all three companies with app stores have made amends to policies they had policies in place to prevent things like this from happening. The whole issue is kind of a gray area that feels like there is a bit of he said she said involved, with the parents pointing the blame at companies like Amazon, Apple, and Google over crappy policies that allowed their kids to buy, and the companies attempting to place the blame on parents who should have better informed their kids. In any case, Amazon said they were willing to fight this issue in court and they weren’t kidding, and obviously the FTC was happy to oblige.

The lawsuit is being filed under the FTC act section 5. Essentially the FTC is claiming that Amazon has made it too easy for people to buy things through their app store. In more specific detail, section 5 of the FTC act targets “unfair or deceptive acts or practices in or affecting commerce.” Complaints for these issues started long before now and well before the FTC had what they view as enough evidence to file the lawsuit against Amazon, with complaints going as far back as 2011 when the in-app purchases within the Amazon app store began. Over that time, tons of complaints from parents about these unauthorized charges made by their children are said to amount to millions of dollars in IAP’s. Part of the FTC’s findings may end up directing the complaints at Amazon’s 1-click purchase button that makes it fast and convenient to pay for goods and services even in the app store. The FTC points out that parents had issued complaints to Amazon over these charges for nearly two and half years up until Amazon finally changed their policy on IAP’s which wasn’t too long ago and prior to today’s lawsuit filing.

The FTC seems to have a fairly strong case against Amazon seeing as how they had no preventative measure set in place when IAP’s first started.(no passwords were required to buy any digital goods)Pair that together with the claims of millions of dollars of unauthorized charges from children across the country over a couple of years, and the FTC’s recent win against Apple over the same problem and it will surely be an uphill battle for Amazon. The mega online retailer will undoubtedly have their own arguments too though, and some of those arguments will most likely take aim at the parents. Should it be Amazon’s fault that children make these in-app purchases without their parents consent? It would be a naive thing to overlook the fact that IAP’s are incredibly easy to mistake for the virtual currency that many games implement and especially so for children who may not have a very strong grasp on the concept of digital goods for real money, but one also has to weigh out whose job it is to teach children about these things.