Amazon sued by US regulators over child in-app purchases

Amazon logo The FTC alleges that Amazon received hundreds of complaints from parents about unauthorised purchases

Related Stories

The US Federal Trade Commission (FTC) has sued Amazon, alleging it allowed millions of dollars of unauthorised purchases by children in its mobile app store.

The FTC is seeking refunds for parents who were charged.

Amazon resisted a settlement offer from the FTC, and wrote in a letter to the regulator earlier this month that it would not accept tighter controls.

In January, Apple settled with the FTC over similar charges.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC chair Edith Ramirez in a statement.

"Even Amazon's own employees recognized the serious problem its process created," she added.

In response to the allegations, an Amazon spokesperson cited a letter the firm sent to the FTC on 1 July in which it wrote it was "deeply disappointed" by the FTC's demands.

"The [FTC]'s unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court," wrote Amazon.

'House on fire'

In its complaint, the FTC used the example of an app called "Ice Age Village", a game designed for children.

The FTC alleged the game "blurred the lines between what costs virtual currency and what costs real money", with "acorns" and "coins" both serving a purpose within the game as well as being available for purchase. The largest quantity purchase available in the app would cost $99.99.

In its complaint, the FTC also alleges that Amazon employees had warned in December 2011 that "allowing unlimited in-app charges without any password was '…clearly causing problems for a large percentage of our customers,' adding that the situation was a 'near house on fire'".

In January, Apple offered refunds of up to $32.5m (£19m) to parents who had been impacted by unauthorised charges and said it would change its billing practices to prevent future unauthorised charges.

More on This Story

Related Stories

More Business stories



From BBC Capital


  • Kinetic sculpture violinClick Watch

    The "kinetic sculpture" that can replicate digital files and play them on a violin

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.