Oct 18, 2018 | Updated: 04:34 PM EDT

FTC Amazon App Lawsuit: Trade Commission Files Lawsuit After Company Charged Parents for Kids’ Purchases

Jul 12, 2014 02:16 AM EDT

(Photo : Claudio Toledo/Flickr)

The Federal Trade Commission has filed a lawsuit against Amazon for charging parents for their children's in-app purchases. According to court reports filed Thursday, the agency is requiring that Amazon refund parents for money spent without their consent.

Director of the FTC's Consumer Protection Bureau, Jessica Rich, said the case against Amazon "highlights a central tenant" of consumer protection laws, that companies shouldn't charge customers without their permission.

Currently, Amazon keeps 30 percent of all in-app charges. Employees raised questions about purchases by children years before the company changed procedure, Rich said. Amazon's official policy on in-app purchases said it does not give refunds, and the reimbursement process is "unclear and rife with deterrents," according to Rich.

However, Amazon's associate general counsel, Andrew DeVore, argued Amazon has refunded customers in these cases.

"We have continuously improved our experience since launch," DeVore wrote in a letter to the FTC sent July 1. "Even at launch, when customers told us their kids had made purchases, they didn't want we refunded those purchases."

In the suit, the FTC noted that Amazon offers many kid-friendly apps on mobile devices like the Kindle Fire. The company violated the FTC Act by using deceptive business practices to charge parents for purchases made without their consent.

Many kids games allow users to accumulate virtual currency through playing but also confusingly charge actual money to earn additional items. For example, the app Ice Age Village urges children to collect virtual coins to redeem for objects in the game but also offer pricey real-money upgrades, as much as $99.99.

The complaint is similar in scope to a recent FTC case against Apple, where the tech giant agreed in a settlement in January to repay customers $32.5 million in unauthorized charges. Politico reported that Apple complained to the FTC that Google allows the same type of purchases to be made without parental consent.

More: Amozon, FTC, apps
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