The Federal Trade Commission sets its sights on Amazon and unauthorized mobile in-game sales to children. On July 10th of this year, the Federal Trade Commission (FTC) brought a consumer protection lawsuit against Amazon.com. The suit charges that the online retailer allowed users of children’s mobile game apps to make in-game purchases without requiring adequate password or other parental controls.
It claims to address the company’s practice of allowing unauthorized credit card charges to customers whose children use freely downloadable games via its Kindle Fire and similar Android-based platforms. According to a Reuters article on the suit, the FTC complaint, filed in a Washington district court, specifically identified two such games, “Tap Zoo” and “Ice Age Village,” in which players build a virtual zoo or manage a town in a universe based on the 2002 children’s film Ice Age. (“U.S. Sues Amazon Over Purchases by Kids Using Mobile Apps.”)
The FTC contends that numerous such games aimed at children encourage users to make in-app purchases of virtual goods, levels, or characters in exchange for real money.
Speaking with Forbes magazine, the director of the Bureau of Consumer Protection, Jessica Rich explained that, “For years, despite the very real consumer issue, Amazon often allowed children to run up unlimited charges without parents’ knowledge or permission.” (“FTC Sues Amazon Over Children's Unauthorized Purchases In Apps.”)
The FTC complaint also notes that Amazon retains 30% of all revenue from such in-app purchases and that its policy regards any such sales as “final and non-refundable.”
In recent years, Amazon has received customer complaints regarding apps from parents whose children have made in-game purchases amounting to tens or even hundreds of dollars. Amazon responded to such complaints in 2012 by requiring that large in-game purchases prompt a password authorization. More recently, documentation for the two games in question now informs parents how to disable all in-app purchases, effectively solving the problem for informed consumers.
Such efforts indicate that the company has increasingly endeavored to address these problems over time. In response to the lawsuit the company’s general counsel wrote, “In-app purchasing was and remains a new and rapidly evolving segment, and we have consistently improved the customer experience in response to data.”
In-app purchasing has become an area of hot dispute among technology companies across the country. In January, the FTC settled a similar case with Apple, Inc. The Cupertino, CA-based company agreed to refund customers approximately $32.5 million in charges for in-app purchases allegedly made by children. Apple additionally vowed to alter its billing practices in order to discourage unauthorized purchases made without parental consent.
In a telling quote from the FTC complaint reproduced by Reuters, an Amazon official explains that, “We believe that parents are excluded from the buying process for these apps.” The lawsuit thus highlights a broader aspect of this issue, one that has been vigorously debated in online forums. The issue at hand involves parental awareness and responsibility for the online behavior of their children. Whether or not this case is about parents failing to adequately supervise their kids, or involves a company deliberately exploiting an area of easily circumvented parental authority will be up to Amazon’s attorneys and lawyers for the FTC to settle.