Amazon is the latest firm to find itself in hot water over unauthorized in-app purchases.
The Federal Trade Commission today filed suit, asking a federal court to require Amazon to refund customers whose children accidentally made purchases within apps downloaded from the Amazon Appstore. The agency also wants Amazon to forfeit any money it made on those unauthorized purchases since Amazon gets a 30 percent cut, the FTC said.
The FTC said unauthorized in-app purchases amounted to "millions of dollars of charges," including one kid who quickly racked up $360 in charges.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC Chairwoman Edith Ramirez in a statement. "Even Amazon's own employees recognized the serious problem its process created."
By now, the Amazon Appstore requires passwords for in-app purchases, but it took a few years to get there.
In-app purchases on the Amazon Appstore date back to 2011 with a beta program; the API was released to all developers several months later. At the time, there were no password requirements for making a purchase, the FTC said, and parents had no recourse if junior racked up charges on their Kindle Fire. The FTC complaint points to internal communications from Amazon employees in Dec. 2011, which said the lack of a password requirement was "clearly causing problems for a large percentage of our customers."
In March 2012, the rules were updated to require passwords on purchases over $20. An early 2013 update required passwords in more situations, but typing in a password once opened up a 15-minute window where a password was not required, allowing for unauthorized purchases. A June 2014 update required consent for in-app charges on newer mobile devices.
When asked for comment, an Amazon spokeswoman pointed PCMag to a July 1 letter that Amazon general counsel Andrew DeVore sent to the FTC's Ramirez.
Amazon held "constructive meetings" with the FTC in recent weeks, so news that it would still be filing a lawsuit was "deeply disappointing," DeVore wrote.
Amazon said the FTC was "unwilling to depart from the precedent it set with Apple despite our very different facts," referring to the $32.5 million settlement the FTC reached with Apple over in-app payments in January.
DeVore said that Amazon did provide refunds to those who complained, but argued that its program has always been lawful. "Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense, and is an unfortunate misallocation of the commission's resources."
Amazon was last in the news for in-app purchases when it dropped them from the ComiXology apps to avoid paying transaction fees to Google and Apple.