Amazon faces potential lawsuit from FTC

Company receives scrutiny over in-app purchases made by children

Earlier this year, Apple reached a $32.5 million dollar settlement with the Federal Trade Commission (FTC) over the allegations that the company did not do enough to prevent young children from purchasing mobile apps without parental consent. Now, Amazon faces similar allegations. 

However, Amazon is resisting the Federal Trade Commission’s request to strengthen its in app store policies, saying that it is ready to defend itself in court rather than agreeing to fines and adopting additional record keeping and disclosure requirements over the next 20 years, according to the Wall Street Journal.

Despite Amazon’s implementation of informed consent and authorization before purchasing mobile apps earlier in June, the FTC is still demanding more prominent notices, password requirements, and easier ways of refunding app purchases.

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An FTC spokesman said, "The commission is focused on ensuring that companies comply with the fundamental principle that consumers should not be made to pay for something they did not authorize. Consumers using mobile devices have the same long-established and fundamental consumer protections as they would anywhere else.”

However, Amazon believes they have an effective system in preventing children from app purchases without parental supervision.  Andrew DeVore, Amazon’s associate general counsel, says that their app store give, “notice of in-app purchasing, effective parental controls and real-time notice of every in-app purchase.” DeVore also says that Amazon has not only given refunds to customers affected by the issue, but has also updated its app store to the standards the FTC set for Apple.

Although Amazon and the FTC claim their meetings over the past few weeks have been “constructive”, a conclusion has yet to be reached. "The commission's unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court," says Andrew DeVore.

Contributing Author

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Jessica Liu

Jessica Liu is a sophomore at Haverford College, where she is majoring in political science. At InsideCounsel, she reports on news for the Women, Influence,...

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