Apple today agreed to settle an FTC complaint over charges incurred by children who made in-app purchases without parental consent. The settlement requires Apple to pay a minimum of $32.5 million and offer full refunds to those affected. In an email to Apple employees, CEO Tim Cook acknowledged entering into the consent decree, a result of months of negotiations with the FTC.
The memo, which was obtained by Re/Code, goes to great lengths to explain how “protecting children has been a top priority for the App Store and everyone at Apple.” Never to pass up on an opportunity to throw a jab at Google, Cook mentions how the controls in place “go far beyond the features of other mobile device and OS makers, most of whom don’t even review the apps they sell to children.” With this case resolved, the reference almost certainly invites the FTC to look at other app stores. It would not be surprising to see similar inquires into the Google Play Store. Google does offer refunds on app purchases, but only within a 15-minute period post-purchase. In-app purchases are not covered by that refund period. In-app purchase refunds are at the descretion of the developer.
Over the past year, Apple has made a number of improvements to in-app purchases, looking to safeguard against kids making purchases without parental consent. The company sent out 28 million emails to customers who might have been affected, offering refunds. In cases where the emails bounced, those customers received postcards. As a result of the proactive nature of their campaign to right a wrong, they received 37,000 claims, all of which were reimbursed. Despite their actions, which resulted in a federal judge being in full agreement that Apple fulfilled their corporate responsibilites, the FTC threatened to sue.
It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.
Seems as if Apple knew they were in the wrong, despite doing their best. They fixed what had been broken and made those affected whole.