FTC Files Lawsuit Over Amazon Purchases by Kids

Brandon Dimmel's picture

The United States Federal Trade Commission (FTC) thinks Amazon.com should be on the hook for unauthorized purchases made by children while using apps on their smartphones, tablets, and even computers. In a recent complaint filed in a U.S. court, the FTC says parents whose children made unauthorized purchases should receive refunds from Amazon.

The problem surrounds free-to-play games that are easily downloaded onto mobile devices; such games typically start out with a basic character and story, but then require players to make expensive (though easy to complete) 'purchases' in order to see the game's more elaborate items and environments.

Games Blur Line Between Real and Fake Purchases

Most free-to-play games make real-world in-app purchases very easy, allowing a child to rack up huge bills for their parents in just a few hours. Furthermore, many of games are directly marketed at children, but don't require a child to acquire adult consent before completing an in-app purchase. The FTC feels that many of the games offered through Amazon blur the line between real-world and fantasy purchases, meaning that even adults could be fooled into buying something online without knowing it.

Amazon.com doesn't make many of the games it sells, but it does profit from the service. The FTC suggests that Amazon takes a 30 per cent cut of all in-app purchases, and went on to say that these profits have resulted in Amazon being very insensitive when it comes to parents seeking a refund. The FTC complaint specifically says that Amazon's refund process is "unclear and rife with deterrents," and makes refunds virtually impossible. (Source: computerworld.com)

Amazon Defends In-App Purchases Policy

For its part, Amazon says it is "deeply disappointed" by the FTC's decision to move forward with the case. "We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn't want, we refunded those purchases," Amazon lawyers noted in a recent statement. (Source: computerworld.com)

This is not the first time the FTC has attempted to persuade a tech company to make in-app purchases more difficult and clarify the associated refund process. Earlier this year, Apple was forced to pay roughly $32.5 million to customers whose children had made expensive in-app purchases without adult consent. (Source: bgr.com)

What's Your Opinion?

Is Amazon partly responsible for in-app purchases made by children? Or is this simply a case of "buyer beware"? How should Amazon deal with the developers behind games that deceive people about in-app purchases? Do you think the FTC should be involved in cases such as this? Have you played free-to-play games before and do you find the in-app purchase process to be deceptive?

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russoule's picture

being a businessman with 45 years of experience, i can say that the purpose of any stockholder company is to make a profit to satisfy the stockholders(retirees, unions,banks,individuals,etc.). however, in all my years of business, I never "snuck" in a fee or charge that the customer wasn't aware of BEFORE the charge was added. these apps DO make charges without the user's awareness. some of the games are very good about indicating the cost of the in-app purchase. but that doesn't excuse them from selling these purchases to minor children who ARE NOT the ultimate payors of the fees/charges. a truly above-board operation would ask the user who is agreeing to the charge to acknowledge the codes or numbers on the credit card used. it isn't ONLY Amazon that does this - Google also requires a credit card to be on file as do virtually EVERY on-line provider of apps. the stated reason is to "make it convenient for the customer", but anyone with common-sense knows it is because they can make the charge NO MATTER WHO is using the equipment, including the 5 year-old or 6 year-old or 11 year-old kid who picks it up and plays Angry Birds. these companies are sneaky and under-handed and YES the FTC should sue them.

TopDriver's picture

Amazon is not the only business model that creates this environment! Apple Store and Google Play use the exact same business model. I played ONE game with this business model and I won't do it again! Not realizing the money spent, I racked up over $125 for a simple online game that would have cost me $20-$60 with the old business model. THIS IS CRAZY!!! It's yet another business model created by CEOs to pull more money out of our pockets as quickly as possible!

alan.computergeek@gmail.com's picture

Don't give your kid a phone if they are not responsible.

ericpeacock79's picture

There's a simple check box at in game purchases "do not ask me again".
The lazy and/or ignorant check that box and allow these things to happen.
My 4 yr old plays games with in app purchase popups all the time.
I don't lose any money because I have it set to require password for each and every purchase.
That simple.

But hey, it's OK to remain ignorant and uneducated, blame and sue others because you do not have the capacity or are to lazy to take a few minutes to learn about the things you buy.
You can always sue, 'cause, 'merica.