Apple to Change In-App Payment Practices, Refund Kids' Purchases

Register now

Apple will refund about $32 million to consumers after the government alleged the company charged minors for mobile app purchases without their parents' consent.

Under a settlement with the Federal Trade Commission, Apple will also change its billing practices to make sure it has obtained express, informed consent from consumers before charging for in-app purchases.

The FTC contends Apple violated the FTC Act by failing to tell parents that by entering a password for one purchase, they were approving any purchases made for the following 15 minutes.

Apple's app store includes a number of items aimed at children that carry charges ranging from $0.99 to $99.99 for virtual items used within the app. For example, three years ago a Smurfs' Village iPhone game came under fire for allowing in-app purchases of pricey virtual Smurfberries.

The FTC says Apple received tens of thousands of complaints about in-app purchases by children, including one consumer who said her daughter had spent $2,600 in "Tap Pet Hotel" and other complaints of more than $500 in charges for "Dragon Story" and "Tiny Zoo Friends."

"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," says Edith Ramirez, FTC chairperson, in a Jan. 15 press release. "You cannot charge consumers for purchases they did not authorize."

Apple did not return a request for comment by deadline. 

For reprint and licensing requests for this article, click here.
Compliance Law and regulation