The U.S. Federal Trade Commission has filed a lawsuit against Amazon, alleging the online retailing giant billed parents for unauthorized in-app purchases made by children totalling millions of dollars.
In a statement released Thursday, the FTC claims Amazon allowed kids to make purchases within apps downloaded via mobile devices, such as the Kindle Fire tablets, without parental consent.
The purchases would then be charged to the account holder without permission.
The FTC also said when Amazon started allowing in-app purchases in 2011, they did not implement measures such as password requirements to prevent kids from unknowingly racking up purchases on their parents' accounts.
"Even Amazon's own employees recognized the serious problem its process created," said FTC chairwoman Edith Ramirez in a statement. "We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."
In a letter sent to the FTC earlier this month, Amazon said it employed "effective" parental controls and provided users with real-time notices each time an in-app purchase was made.
"We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn't want, we refunded those purchases," wrote Andrew DeVore, Amazon's associate general counsel.
The letter was submitted after the FTC informed Amazon it would move forward with the lawsuit unless Amazon made changes to its app-store model similar to Apple.
In January, the FTC settled with Apple over in-app purchases, requiring the company to employ stricter policies for obtaining consent, such as password requests. The settlement was worth $32.5 million.
-- USA Today