A federal judge granted the Federal Trade Commission’s request for summary judgment in the agency’s lawsuit against Amazon Inc., alleging the company billed consumers for unauthorized in-app charges incurred by children.
The judge's order in the case finds that Amazon received many complaints from consumers about surprise in-app charges incurred by children, citing the fact that the company’s disclosures about the possibility of in-app charges within otherwise "free" apps were not sufficient to inform consumers about the charges.
The order calls for further representations from the FTC and Amazon regarding the precise amount of monetary relief Amazon owes consumers as a result of its unlawful practices. In addition, the order grants a partial summary judgment requested by Amazon regarding injunctive relief requested by the FTC in the case.
The FTC’s case against Amazon was first filed in July 2014.
Kids' games, according to the complaint against Amazon, often encourage children to acquire virtual items in ways that blur the lines between what costs virtual currency and what costs real money.
In the app "Ice Age Village," for example, the complaint noted that children can use "coins" and "acorns" to buy items in the game without a real-money charge. However, they also can purchase additional "coins" and "acorns" using real money on a screen that is visually similar to the one that has no real-money charge. The largest quantity purchase available in the app would cost $99.99.
The FTC reached settlements with Apple Inc. and Google Inc. related to unauthorized in-app charges incurred by children requiring the companies to fully refund consumers for such charges, resulting in refunds to consumers totaling over $50 million.
Companies that create the games typically keep most of the money. However, the FTC's lawsuit claimed that Amazon.com retains 30% of those charges made through apps it sells and through its devices, including the Kindle Fire.
"We are pleased the federal judge found Amazon liable for unfairly billing consumers for unauthorized in-app purchases by children," said FTC Chairwoman Edith Ramirez. "We look forward to making a case for full refunds to consumers as a result of Amazon's actions."