Apple Settles FTC Complaint, To Pay $32.5 Million In Refunds

In-app purchases are a great way for developers to make money out of their apps, which only bring in money when they’re purchased. Some developers offer apps for free but limit functionality, requiring users to pay to unlock more features. Now adults might be able to pace themselves when it comes to in-app purchases, kids generally aren’t so responsible. Quite a few cases have been reported in the past when parents found out that their kids had racked up hundreds of dollars in credit card purchases while playing games. A complaint was filed against Apple for billing consumers even though parents hadn’t consented to those purchases. Cupertino has now settled with the FTC, it has agreed to modify its billing practices and to refund consumers by paying a minimum of $32.5 million.

FTC Chairwoman Edith Ramirez said that this settlement is a “victory for consumers harmed by Apple’s unfair billing,” and a single to the business community that it doesn’t matter if you’re doing business in a mall or in the mobile arena, people enjoy fundamental consumer protections. FTC’s complaint alleged that Apple violated FTC Act by not telling parents that after entering the password to approve a single in-app purchase, there was a 15-minute window in which children could make subsequent purchases without requiring authorization. Apple is now required to modify its billing practices and obtain express informed consent prior to billing them for in-app purchases, it is to make these changes no later than March 31, 2014. The floor amount of $32.5 million will be used to reimburse consumers that were affected, the company will notify users who will then submit a claim. Floor amount means that any unclaimed money below $32.5 million will be handed over to the FTC.

Adnan Farooqui
Categories: Apple
Tags: Apps, ftc