When Amazon introduced in-app purchases in 2011, it was almost immediate. The news of parents being charged for in-app purchases their children made was rampant. Because there were no passwords or other security to prevent these purchases, the FTC has looked upon this situation in violation of the FTC Act.
The Complaint Against Amazon
The FTC alleges Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.
As we all know, most apps that specifically use in app purchases are pretty sneaky. They tell you that you can finish this level if you have 10 coins. This will let you skip the level, but you only have 5 coins! How do you get more? That will be $5 please. Keep doing this every level you can’t finish, and you are going to wrack up a serious bill.
Finally in March 2012, Amazon changed their security on in-app purchases. They added the requirement of a password to authorize in-app purchases. However, despite seeming like things were going well, this one time authorization left a window of time open. It was anywhere between 15 minutes and an hour of time where the app was allowed to continue to make purchases without further consent. It wasn’t until June 2014 that the password protection functioned properly, but only on their newer devices according to the complaint.
Make no mistake, letting your kids run rampant on a device with an open account is deserving of some order. However, since Amazon did not implement any sort of authorization for in-app purchases, I do find fault with them here. Also note, the FTC files a complaint when it has “reason to believe” that the law has been, or is being violated and it appears to the Commission that a proceeding is in the public interest.