Amazon Found Liable for In-App Purchases Made By Kids

Just because an app is labeled as “free,” doesn’t mean it won’t end up costing you.

No one knows this fact better than parents who discovered Amazon was billing them for unauthorized in-app purchases racked up by their children. As a result a federal judge has determined that Amazon will be held liable for the charges since it did not sufficiently warn its customers about the possible charges associated with free apps.

The lawsuit was first brought against Apple by the Federal Trade Commission(FTC) in July 2014, after the agency reached settlements with both Apple and Google concerning the same issue.

In an FTC press release Chairwoman Edith Ramirez said,

We are pleased the federal judge found Amazon liable for unfairly billing consumers for unauthorized in-app purchases by children.We look forward to making a case for full refunds to consumers as a result of Amazon’s actions.

Oftentimes app developers incorporate revenue generating features aka “in-app purchasing” into their free apps in order to upgrade or customize users’ gaming experiences. These can be seen in the form of additional gaming coins, extra levels, or lives.

The problem arises when parents download apps onto their kids’ devices using their username and password, which inadvertently grants their children access to saved billing information.

In the case of Amazon, entering one’s password into a device opens up a window for approximately 15 minutes to an hour, in which children can spend at will without having to re-enter information.

Following the FTC’s case against Apple, the App Store was forced to change its labeling of apps from “Free” to “Get,” in order not to confuse customers on whether or not the app could still contain in-app purchases.

The FTC also won $32.5 million in the settlement with Apple, and another $19 million from Google to be refunded back to customers. In the case against Amazon, both parties still have to present more information to the court before an official settlement amount can be determined.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.