Apple to pay out millions in row over ‘illicit’ app downloads by children

Purchases only come to light when bill lands

parents don't know full scope of charges - ramirez

Parents whose kids bought apps and games upgrades for their iPhones and iPads without consent are to be compensated by Apple following a landmark US ruling. The Federal Trade Commission (FTC) decision means Apple will have to refund at least $32.5 million to parents, with no maximum on the total it could pay out, and to modify how its App Store obtains consent for in-app payments by March 2014. Apple’s App Store generated $10 billion in sales last year, with the Cupertino giant taking a 30 per cent slice, but its success has often been at the expense of parents who only learn about what their children have downloaded once the bills start landing.

According to the FTC, Apple has failed to warn parents that, when they open a 15-minute window using their password, they also allowed unlimited purchases – often made by their children without them knowing.

Said Edith Ramirez, the FTC’s chairwoman, “When a parent enters their password they don’t know the full scope of the charges they can incur.”

Though the FTC focus was on apps for children, its ruling means Apple will now need to change its billing practices for all apps, not just those focused on youngsters.

According to the Commission, Apple had been aware of the issue since 2011 and “failed to fix the problem” which, it says, continues “to this day”.

The FTC’s case is not the first time Apple has been investigated over in-app payments.

This time last year [2013] it was forced to settle a class-action lawsuit on the same issue, agreeing to pay out tens of millions of dollars to up to 23 million affected customers.

About Dave Evans

Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here
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