Amazon drops appeal, to pay $70 mn for kids app buys

The FTC said Tuesday (April 4) that could also pave the way to more than $70 million in refunds.

The Federal Trade Commission and Amazon Inc. have agreed to end appeals related to last year's court findings that that the company billed consumers for unauthorized in-app charges incurred by children, paving the way for affected consumers to seek refunds from the online retailer shortly.

A year ago a judge rejected Amazon's request to refund the purchases in the form of gift cards or online credits, so customers can expect to receive payments direct to their credit or debit card.

"This case demonstrates what should be a bedrock principle for all companies - you must get customers' consent before you charge them", Thomas Pahl, acting director of the FTC's Bureau of Consumer Protection, said in a statement.

Have you paid a financial price for handing your tablet to the kids? The FTC first filed suit against Amazon in 2014 for allowing in-app purchases made by kids on apps downloaded from the Amazon app store that did not receive parental consent. The FTC agreed to drop its appeal requesting an injunction that would have banned Amazon from continuing this practice future. Amazon had taken a 30 percent cut from the in-app purchases, according to the FTC.

Amazon has made a decision to refund up to $70 million to its users, a move that comes a year after the company was found guilty of illegally billing users for unauthorised in-app purchases. Amazon's in-app charges are final and non-refundable.

Amazon will be leading the refund operations, and details on the program will be announced shortly, the FTC said.

Do you think parents have some responsibility for letting their children play with mobile phone games without supervision?

  • Arturo Norris