FTC Approves Final Order in Apple Inc. Case Charging for Kids’ In-App Purchases Without Parental Consent

Following a public comment period, the Federal Trade Commission has approved a final order resolving FTC allegations that Apple Inc. unfairly charged consumers for in-app purchases incurred by children without first obtaining their parents’ consent.

The settlement was first announced by the Commission in January. In its complaint, the agency alleged that Apple failed to notify parents that entering their password would approve a purchase and then open a 15-minute window in which unlimited charges could be made without authorization. In the complaint, the FTC cited examples of children incurring thousands of dollars in in-app purchases without their parents’ consent.

According to the settlement, Apple must change its billing practices by March 31, 2014 and ensure that it has obtained express, informed consent from consumers before charging them for in-app purchases.

Apple also must provide full refunds, totaling a minimum of $32.5 million, to consumers who were billed for in-app purchases that were incurred by children and were either accidental or not authorized by the consumer. Should Apple issue less than $32.5 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission. By April 15, 2014, Apple must notify all consumers charged for in-app purchases with instructions on how to obtain a refund for unauthorized purchases by kids.

For more information about this case as well as the other FTC cases, visit the FTC online.

Advocates believe Kid Influencers Deserve Same Protections as Other Child Stars

Although there are child labor laws in California that are designed to protect child stars from exploitation (The Coogan Act), the same protections don't always apply to child YouTube and Instagram stars, or kid influencers. Kid Influencers accounts are usually run by their parents since platforms like YouTube and Instagram have age limits of 13 years old. One consequence of not owning their accounts is that all profits received go directly to the guardians and, unlike traditional child actors in California, these guardians are not required to set aside some of the profits for the children. Advocates like Paul Petersen, believe the legal protections like those in California should apply to children outside of the state. Petersen has said that because YouTube is in San Bruno, California and they are paying to broadcast children, California law must apply to those child stars. Many guardians of kid influencers feel these regulations are unnecessary and that the guardians are doi...

CARU Speaks at Community Board in Manhattan

CARU staff attorney Andra Dallas gave a presentation to Community Board 1, serving lower Manhattan on Monday, December 7 th . Andra spoke to the Board’s Youth Committee about the importance of teaching children about understanding advertising and safe online practices. District Manager Noah Pfefferblit remarked, “thank you for your informative presentation to our Youth Committee members,” and offered the Board’s assistance if they “can be helpful to the important efforts at the Children's Advertising Review Unit.” Are you interested in having a CARU staff member visit your community board? Contact adallas@caru.bbb.org.

Kids Internet Design and Safety Act Seeks to Protect Children from Harmful Online Content

United States Senators, Mr. Richard Blumenthal from Connecticut and Mr. Edward Markey from Massachusetts, introduced a new bill referred to as the Kids Internet Design and Safety Act (the “KIDS Act”). One of the Senator’s introducing the KIDS Act, Mr. Edward Markey, was the co-author of the Children’s Online Privacy Protection Act (“COPPA”). The KIDS Act seeks to include noteworthy advertising rules and create new protections for children online, specifically for online users under the age of 16. The proposed advertising rules within the KIDS Act are to ban websites from: (1) exposing young online users to advertisements “with embedded interactive elements”; (2) recommending any content involving alcohol, nicotine, or tobacco to young online users; and (3) recommending content that includes influencer marketing, like unboxing videos, or host-selling to young online users. Additionally, the KIDS Act seeks to prohibit certain online features to protect children, like prohibiting...

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