FTC ropes Apple for at least another $32 million in in-app purchase repayments

FTC ropes Apple for at least another $32 million in in-app purchase repayments

The Federal Trade Commission is requiring Apple to change its practices for in-app purchases and to refund money parents have already paid. Although Apple's already settled a class-action lawsuit over in-app purchases, that isn't enough, according to the FTC:

The FTC’s complaint alleges that Apple violated the FTC Act by failing to tell parents that by entering a password they were approving a single in-app purchase and also 15 minutes of additional unlimited purchases their children could make without further action by the parent.

Apple CEO Tim Cook sent a memo to employees outlining the terms of the agreement and recapping what Apple's already done, including arranging refunds for the 37,000 App Store customers who responded to e-mails and mailings sent by Apple in the wake of that class action settlement. The FTC decree clearly doesn't sit well with Cook, according to Re/code:

It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.

As part of the arrangement, Apple is required to refund any in-app purchase that was made by a child without their parent's consent, and the FTC is making Apple set aside $32.5 million at the minimum to pay back those charges. App Store customers affected by an errant in-app purchase made by a minor are eligible if the purchase was made between March, 2011 and March, 2014 - the deadline the FTC has imposed for Apple to make changes to the way the App Store works.

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Peter Cohen

Mac Managing Editor of iMore and weekend Apple Product Professional at a local independent Apple reseller. Follow him on Twitter @flargh

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Reader comments

FTC ropes Apple for at least another $32 million in in-app purchase repayments


Wow Apple just can't catch a break with these Federal agencies can they?

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Apple never admits wrong doing and they seems to think that a class action settlement protects them from any federal lawsuit.

The FTC did a good thing here as it protects those that are unaware.

It's all going to be okay, Apple has to get used to what it's like to be hugely successful after trying for so long and finally succeeding. The only thing I personally don't like about the app store, is the inability to get refunds for applications that don't live up to what they claim they will do. I believe this is a very bad online store paradigm for that one reason alone. I honestly find it unethical.

Seems to me that this is just more proof that everyone does not need or should have a smartphone. Ignorance is not an excuse. People who like to give the kids their phone to play with aren't old enough themselves if they don't see fit to lock it down first so these things done happen. It amazes me how people want to hold everyone else responsible for their own mistakes. The FTC's ruling is not only ridiculous it's an embarrassment to society. They who can't even control the carriers of whom they are suppose to be in charge of want to pass a ruling on a company they don't control over in-app purchases that aren't even their fault. Freakin' ludicrous.

Exactly. Ignorance is never an excuse. Those "parents" need to stop crying and own up to their own mistakes, and if it costs them money, then good, maybe that will make them actually learn something for once about responsibility.

RIght. I guess the thousands of parents out there are purely ignorant. O wait.. maybe thats just you...

There are only 2 options, 1, they are ignorant of how the system works, and deserve the charge, or 2, they know how the system works, and would take the steeps needed to not have these charges happen. Your lack of understanding is no ones fault except your own. Own it, and stop crying to every one else on the planet that it is any one else's fault except your own.

You're right I guess the FTC just got it wrong this time... I do hope you understand my sarcasm

I've notice the have a promotion on the page that tells you about in-app purchases. I guess these things just make it better for the consumer!

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so whats to stop someone from paying for a game and then getting a bunch of stuff in-game and then claiming it was their child that did that??

Absolutely nothing. But understand it's for a specified time frame. Anything after that will probably net you nothing but a lighter wallet.

I have seen ads from King.com and they have said something in the end and fine print on the final screen about some things requiring in-app purchases. I feel that the parents are ignorant because no-one tells them how to block them from the get-go. So don't blame the parents blame the ignorant people who don't inform them when they purchase. If purchased on-line from Apple, they could send an email about it after purchase.