Apple agreed on stronger parental purchase approval at its App Store and to refund more than $32.5 million in children's purchases made without parental consent, the Federal Trade Commission announced.
The FTC said the Cupertino, Calif. company agreed on the terms and will refund parents whose children bought merchandise without their full consent, according to the New York Times.
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Last year, Apple settled a lawsuit over in-app purchases made by children who used an exploit that would let users buy merchandise within 15 minutes of purchasing an application without having to log in again. The company said it had 37,000 claims so far. Since 2011, Apple began requiring users to re-login to make an in-app purchases to avoid kids and others exploiting the 15-minute window. However, the new login with password opens another 15-minute window that can be exploited, according to the FTC.
“We allege that Apple has been aware of the issue since at least March of 2011,” Edith Ramirez, the FTC chairwoman told the Times. “In our view the problem continues and it needs to be rectified.” Apple has until March 31 to notify affected users about the refunds and to make changes.
The commission said that Apple needs to be transparent about the 15-minute window and let users make a choice to accept it or opt out of it.
The problem is that many of these apps make most of their money selling in-app merchandise, more so than those that sell an app outright, so the business model is not likely to go away.
Steve Dowling, an Apple spokesman, said that Apple has been protecting children since its beginning.
“Apple is proud to have set the gold standard for online stores by making the App Store a safe place for customers of all ages,” Dowling told the Times “Today’s agreement with the FTC extends our existing refund program for in-app purchases which may have been made without a parent’s permission.”
If the refund claims total less than $32.5 million, the rest of the money goes to the FTC. There is no limit on the amount of refunds.
The new rules are a good idea, especially for parents who often leave their child alone with an iPhone or iPad for an hour at a time. However, we still think that parents have some responsibility here, including teaching their children about apps, purchasing merchandise and what is and isn't OK to do. If their children took their checkbooks and wrote a check to someone on eBay to get a new XBox, would they be suing their bank or the guy on eBay? Or would it be time to have a talk to their child about not using money that doesn't belong to them?