Apple has agreed to pay at least $32.5 million to settle a
Federal Trade Commission (FTC) complaint that it charged consumers for in-app
purchases incurred by children on kids’ mobile apps without verifiable parental
consent. Apple has also agreed to change
its billing practices by March 31, 2014 to ensure that it receives “informed”
verifiable parental consent before
charging for in-app purchases made on mobile apps directed to children. Apple
also agreed that if it gets consumers’ consent for future charges, consumers
must have the option to withdraw their consent at any time.
Under the
current system on iTunes, parents were required to enter a password to process
in-app purchases, however, according to the FTC, Apple failed to notify parents
that by doing so, in addition to approving a single in-app purchase that they
were also consenting to 15 minutes of additional unlimited purchases their
children could make without further action from the parent.
In its press
release, the FTC noted that Apple has received thousands of complaints about
unauthorized purchases. FTC Chairwoman Edith Ramirez said in a statement, “This settlement is a victory for consumers harmed by Apple’s unfair
billing, and a signal to the business community: whether you’re doing business
in the mobile arena or the mall down the street, fundamental consumer
protections apply, you cannot charge consumers for purchases they did not
authorize.”
Under the settlement, Apple must pay at least $32.5
Million to consumers billed for in-app purchases incurred by children that were
accidental or unauthorized. Should Apple be required to issue less than the
full $32.5 million, it must forfeit the balance to the FTC.
For more information visit the FTC's Press Release.