‘Deeply disappointed’ Amazon fights FTC over in-app purchases made by children

“Amazon.com Inc is fighting U.S. regulators’ demands that it pay a penalty over its policies on purchases made by children on smartphone applications, according to documents seen by Reuters,” Diane Bartz reports for Reuters. “Amazon, the largest U.S. online retailer, faces a potential lawsuit from the Federal Trade Commission, which wants the company to enter into a settlement similar to the one reached with rival Apple Inc in January.”

“In a draft complaint, the FTC said there have been thousands of complaints related to millions of dollars in unauthorized in-app charges by children on Amazon devices. The agency said Amazon only changed its in-app charging policies last month,” Bartz reports. “‘The commission’s unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court,’ Andrew DeVore, an Amazon associate general counsel, said in the July 1 letter.”

“In January, Apple agreed to refund customers at least $32.5 million and change its billing practices to ensure it obtains consent from parents before charging for in-app spending. The FTC is pushing Amazon to refund customers, give up any profits from inappropriate activity and to compensate for the FTC’s costs,” Bartz reports. “Amazon said it was ‘deeply disappointing’ that weeks of negotiations failed to sway regulators.”

Read more in the full article here.

MacDailyNews Take: Aw, Amazon’s tiny little man is upset. Too bad.

23 Comments

    1. Amazon is deeply disappointed because it still has not made a profit since its inception unlike Apple inc.
      Amazon is deeply disappointed because all the (bribes, Oops!) contributions it has made to various lobbies have not taken traction on this issue.
      Amazon is deeply disappointed because its argument that it is not like Apple inc. (Who paid off their fine and refunded its customers expenses and topped it up with vouchers as an apology was taken into account as a precedent.) because Apple inc. is a hardware & software company which Amazon is not was swept aside.
      Amazon is deeply disappointed because if this ruling is enforced, it will open the door to Amazon having to account for its trading practice, i.e screwing small business & drafting unfair terms of contract.
      Amazon is deeply disappointed because the EU can use that ruling to open its own investigation to add to the other investigations it is currently conducting into Amazon.
      Amazon is deeply disappointed because if it does pay up the FTC’s costs and refunds its customers money plus interest, it will be open to being sued by every State in America in the same way every State in America sued Apple inc.
      Amazon is deeply disappointed because…. Oooooh shit!!!!!! It just happened.
      Amazon is deeply disappointed because they don’t sell diapers that big to poop into!

      1. Amazon has indeed made profits … for the management. Bezos loves it that you (and the IRS) think that Amazon makes no money.

        Amazon is doing fine, it prints money for the insiders and investment “banks” who continue to decimate small manufacturers and retailers around the globe. As for the small investor, employee, and community — indeed, Amazon and its ilk offer no meaningful profit, only subsistence wages. In case you forgot, the corporation is feudalism. Like most modern corporations, it specializes in finding the areas of the world where pollution and child labor are legal, and where financial transparency is not required. When consumers allow parasites like this to take over the manufacturing &retail industries, not to mention the press, then we should not be surprised when our Main Streets are gutted of real brick and mortar stores, and the average consumer no longer has realistic options to try before we buy, nor any real customer service before and after the sale. Few have the choice between the durable locally-made product or the imported disposable plastic “equivalent”, as the corporate office has already made that decision for you. The typical modern consumer — now brainwashed into thinking that initial purchase price is the only thing that matters — doesn’t see this as a problem. They actually think they are “saving money” as their communities around them crumble and corporations suck up all the liquid capital that once flowed freely within the communities where the average people live.

  1. While I am no fan of Amazon by any stretch of the imagination, I am more concerned about how much of a nanny the Fed is becoming. What’s good for the goose is also good for the gander, but the Fed as a whole appears to be enforcing its own version of things at will and unchecked. If it weren’t Amazon I would be trumpeting the fact that they are fighting back.

    1. So, without the FTC, you would expect Amazon, and the other companies whose actions it corrects, to just see the light and do the right thing? This is just one more example of how unfettered capitalists view the world and their relationship to citizens. “Screw them until someone makes you stop”.

      As citizens, we have only the power of the Government we design and authorize to act on our behalf, to play that protective role. Sometimes individuals can band together and compensate for Government fecklessness, witness the citizens group that persuaded Target ban on carrying firearms in their stores. But they were just up against a group of weak minded goof-balls. Capitalists like Amazon (or AT&T, or the banking industry, etc, etc, etc) will always take the action that will move the most money from the pockets of the citizens to theirs cash registers.

      It is interesting to see that you feel it is OK for companies other than Amazon to take advantage of children. Perhaps you had a bad nanny growing up.

      1. I have no problem with government oversight so long as it has a check and balance mechanism in place. The current administration has left me disillusioned and frustrated because it has flown in the face of its promises to protect freedom and liberties. This administration appears to instead consider itself a better caretaker of the people by imposing its own version of “how things should be.” When everyone has to conform to a standard that they have no mechanism to call it out for short- sighted actions at best, or plain tyranny at worst, then liberty and freedom no longer exists.

        In the case of Apple and Amazon in app purchases being made by kids, unbeknownst to their parents, it’s difficult to say that there was malice on their part. This whole thing is rather gray. I think Apple did the right thing as their ecosystem is marketed as being easy to use and family friendly. Indeed, this is one of the main reasons I stick with it. But as a parent of 5, I can’t help but wonder how parents don’t take the time to put safe guards in place on their own to prevent this. It isn’t as if Apple didn’t include the functionality. Their mistake (if it can be called that) was not making it completely and utterly idiot proof. I chalk this whole matter up to a culture that doesn’t want to take responsibility for its own individual mistakes and would rather blame someone else.

        Finally, I am a firm believer in being skeptical of any government. If history has taught us nothing else, it is that government in any form should never be trusted. Ever. In our country, this is the final check and balance as we have the power of our vote.

        1. I agree with you. Skepticism of government is a necessary thing for the governed. But, with one branch of our government firmly committed to doing nothing as long as Obama is in office and one branch seemingly committed to dismantling the few protections the many had against the few, the President looks like our only hope right now. Hopefully we’ll take the lessons of the last two Congresses to the ballot box in November. Too bad there is no flush handle on the SCOTUS.

    2. When people refer to the “Fed” they mean the Federal Reserve Bank, not the Federal Government. When you refer to the Federal Government you should use the term “Feds”.

      P.S. The Federal Reserve Bank is neither part of the Federal Government, nor is it a Bank.

      1. You are correct. I apologize for taking liberty in use of the abbreviation. While government reps are routinely called “the Feds” that doesn’t necessarily mean I can shorten things more when it is already in use in reference to another entity entirely.

  2. Once again, I don’t shop at Amazon for many reasons. When you have low character it shows in everything you do. Amazon has very low character. In-App purchases are designed to go after kids who play games and want to boost their stats quicker than without the purchases. Video game companies (low character) love this “new” idea and smile from ear to ear when they talk about it. Just like when Hillary Clinton backed up from her podium and turned a 360 telling her audience that America is great because we can bail out those who foolishly bought homes they couldn’t afford and then were facing foreclosure. These people use anything they can for their own agendas including our children. The worst of American business practices from the worst of American companies.

    1. If you know anyone who was in the mortgage industry in the early 2000’s, they’ll tell you that there was deliberate misleading of applicants to get them to take out a larger mortgage than they could afford.

  3. When Apple was going through this earlier in the year you were all saying “they shouldn’t have to pay for this”. Now, because Amazon is being attacked you have a different opinion, coupled with the fact that Apple chose to not make waves and just refund the money. Parents have an obligation to know what their kids are doing and when there Minoress parent should be held accountable for their kids actions.

    1. How come nobody looks at the context and details, and just assumes Apple supporters and Apple are immense hypocrites all the time?

      For one thing, Apple always provides good customer service and care — I for one am a parent of a child who racked up about 300 bucks in in-app purchase charges (from only three clicks! The in-app purchase was 100 bucks!). I emailed Apple and they immediately looked into it and returned the 300 bucks no questions asked. They just pointed out the settings to switch off in-app purchasing without password, etc.

      So, Apple has had parental settings, but still plays ball with you anyway, when you go to Apple directly.

      Does (did) Amazon?

      What many may have been meaning, when saying “they shouldn’t have to pay for this”, is perhaps about the making of an across the board public announcement that anyone who ever *thought* their child had *ever* purchased something they weren’t happy about, whatever and whenever it was, could now apply for payment from Apple — bearing in mind that they could have gone directly to Apple at the time, in the first place, even if the parental settings weren’t properly applied.

  4. Deeply disapointed?
    That sound kind of compassionate! Last thing anazon deserves!!
    A company with a megalomaniac at the helm who’s intent is not to make a dime yet distroy other industries and businesses !

  5. As I said in an post regarding Amazon:
    I’m reserving a front seat for this show. It’s going to be fun to watch Amazon get nailed for its irresponsible behavior, a long time coming.

    The Amazon bubble continues to deflate…

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