FTC Goes After Amazon for kids In-App Purchases Issues – Is Google Next?

In-App Purchase

The issue with unauthorized in-app purchases goes back years. We first heard complaints from parents back in 2010 when little ones were filling their barrels with Smurfberries. Four years later, Apple had made changes to their in-app policies, and updated the App Store with more noticeable warnings, but the company was still required to sign a decree with the Federal Trade Commission (FTC) promising compensation of $32.5 million to qualified recipients, as well as making a few more changes that would ensure consumer’s express consent.

Earlier this week, the FTC announced its intentions with Amazon. The governmental regulation department released a statement yesterday officially alleging that Amazon unlawfully billed parents for millions of dollars in unauthorized in-app purchases. Amazon does not plan on settling the way Apple did. Amazon’s lawyers claim the FTC is treating the online retail giant’s situation similar to the iPad maker’s, but the two situations involved “very different facts” so the company has “no choice but to defend our approach in court.”

At the same time, Politico discovered a communication between Apple’s general counsel Bruce Sewell and FTC Chairwoman Edith Ramirez, as well as Democratic Commissioner Julie Brill. In a letter, Sewell pointed to a report that criticized Google for its faulty in-app purchase practices. “In thought this article might be of some interest, particularly if you have not already seen it,” wrote Sewell.

Although the FTC did not give any official information as to other companies it is investigating, it is clear the government agency is has an interest in consumer protection for the quickly-evolving technology industry.

The report sent to the FTC pointed out that users who made Google Play purchases on Android-based devices ended up with the same unlocked window for 30 minutes after a password was entered. The report accused Google of allowing children to “spend like a drunken sailor” for 30 minutes after the adult initially entered the password.

Similar to Apple, Google revised its in-app purchase policies, making it easier for consumers to understand and restrict unauthorized access. However, the FTC won’t likely let the issue go if it does decide to pursue action. Consumer advocacy groups stress the importance of FTC settlements.

“Companies change their practices and their privacy policies with the weather,” said Joni Lupovitz, vice president of policy at Common Sense Media. “That’s why you want them to be under an FTC order that says here’s a principle or policy or practice, you’ve got to stick to it.”

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About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik