Amazon Inc. and the Federal Trade Commission (FTC) have agreed to end a legal battle over unauthorized in-app charges made “accidentally by children”. The FTC released a statement last week with an update that Amazon has recently agreed to withdraw the appeals, following the 2016 court ruling that Amazon was found billing consumers for “unauthorized in-app charges”.
More than $70 million
Amazon, a company founded by Jeff Bezos, was taken to court in 2014 for at least $70 Million in charges the company made over a nearly five-year period from November 2011 to May 2016.
The court found that the company was unable to obtain the consent of parents for purchases made by children while using certain mobile apps, such as online games. The FTC requested, but was denied by the court, an injunction that would prevent Amazon from conducting similar activities in the future. Last year, the FTC also filed cases against two other companies: Apple and Google.
Missing customers' consent
The acting director of the FTC’s Bureau of Consumer Protection, Thomas B. Pahl, said that the case demonstrated that obtaining customers’ consent should be “a bedrock principle” for all companies, before they start charging them. Consumers who were affected by these unexpected charges should receive a full refund.
The company, like the other two that was sued by the commission, decided to comply with the request to refund the $70 million to affected U.S users. Apple was made to pay back $32 million, and Google agreed to a $19 million refund. Amazon is expected to announce the refund program very soon.
Unauthorized purchases
In the case of Amazon, the federal judge ruled in April last year that Amazon was surprising consumers by not providing prior information that these “free” games they have downloaded allowed for “unlimited” in-app purchases.
The company is said to have provided disclosures and prompts on these incurring charges, but only after consumers have been complaining and after years of charging them. The FTC did not find these efforts adequate. The company’s app store has many children’s apps downloadable for mobile devices, including Kindle Fire. Amazon’s limitless setup was letting children spend their parents’ money for virtual goods, the likes of coins and stars, and all without their parents knowing. According to Independent, Amazon had offered to replace the illegal purchases with gift cards, but their proposal was rejected.
