FINAL ORDER APPROVED BY FTC REGARDING KIDS IN-APP PURCHASES OF APPLE PRODUCTS

FROM:  FEDERAL TRADE COMMISSION 
FTC Approves Final Order in Case About Apple Inc. Charging for Kids’ In-App Purchases Without Parental Consent

Following a public comment period, the Federal Trade Commission has approved a final order resolving FTC allegations that Apple Inc. unfairly charged consumers for in-app purchases incurred by children without their parents’ consent.

The settlement was first announced by the Commission in January. In its complaint, the agency alleged that Apple failed to notify parents that entering their password would approve a purchase and then open a 15-minute window in which unlimited charges could be made without authorization. In the complaint, the FTC cited examples of children incurring thousands of dollars in in-app purchases without their parents’ consent.

Under the settlement, by March 31, 2014, Apple must change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for in-app purchases.

Apple also must provide full refunds, totaling a minimum of $32.5 million, to consumers who were billed for in-app purchases that were incurred by children and were either accidental or not authorized by the consumer. Should Apple issue less than $32.5 million in refunds to consumers within the 12 months after the settlement becomes final, the company must remit the balance to the Commission. By April 15, 2014, Apple must notify all consumers charged for in-app purchases with instructions on how to obtain a refund for unauthorized purchases by kids.

The Commission vote approving the final order and letters to members of the public was 3-1, with Commissioner Wright voting in the negative. (FTC File No. 112-3108, the staff contacts in the Bureau of Consumer Protection are Duane Pozza, 202-326-2042; Jason Adler, 202-326-3231; and Miya Rahamim, 202-326-2351.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.