Apple to Refund $32.5M for Kids' App Purchases
Apple is set to refund at least $32.5 million to customers whose children purchased apps without adequate parental consent. It's part of a settlement with the Federal Trade Commission.
If your child has a habit of going on app-buying sprees without your knowledge, this settlement should help curb your kiddo's spendthrift ways.
Public Comment on Consent Agreement Package
The FTC alleges Apple violated the Federal Trade Commission Act by failing to inform account holders -- in this case, parents -- that by entering a password, they were approving not only a single in-app purchase but also a 15-minute window in which children could incur unlimited charges without further action by a parent.
Considering Apple boasts a garden variety of kids' apps in its App Store that range in price from 99 cents to $99.99 per in-app charge, it's not hard to see how parents could get sticker shock from the unauthorized purchases.
According to the FTC's complaint, Apple received tens of thousands of complaints about unauthorized in-app purchases by children, totaling millions of dollars. But the company failed to act.
Refunds for Kids' Unauthorized Purchases
Under the settlement with the FTC, Apple will be required to provide full refunds, totaling a minimum of $32.5 million, to consumers who were billed for in-app purchases made by kids that were either accidental or not made by the consumer.
Apple is required to provide the refunds promptly at the request of an account holder.
If you're not sure whether you're affected or how to go about getting a refund, don't worry. Under the settlement agreement, Apple must give notice of the availability of refunds to all consumers charged for in-app charges, and provide instructions on how to obtain a refund for unauthorized purchases made by children.
Apple's New Billing Requirements
Apart from the refund, Apple will also be required to change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for items sold in mobile apps (specifically, in-app charges).
In addition, if Apple obtains consumers' consent for future charges, consumers must have the option to withdraw their consent at any time.
Apple has until March 31, 2014, to make these changes.
The consent agreement package is currently open for public comment until February 14, 2014. To weigh in on the agreement, you can submit your comments via an online Comment Form.
- Apple to Refund App Store Purchases Made Without Parental Consent (The New York Times)
- Baby 'Learning' Apps Are Misleading: Complaint (FindLaw's Free Enterprise)
- FDA to Regulate Smartphone Health Apps (FindLaw's Common Law)
- Class Action Antitrust Suit Against Apple Moves Forward (FindLaw's Common Law)