Amazon, FTC End Dispute Over In-App Charges

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By Alexis Kramer

Amazon.com Inc. and the Federal Trade Commission April 4 moved to end their appeals of a federal court decision finding Amazon liable for forcing customers to pay for unauthorized in-app purchases by their children ( FTC v. Amazon.com Inc. , 9th Cir., No. 17-35052, joint motion for voluntary dismissal filed 4/4/17 ).

A federal district court in Washington held in April 2016 that Amazon’s billing practice caused substantial harm to consumers, in violation of Section 5 of the FTC Act. The court denied the FTC’s request for a court order barring Amazon from continuing the practice because it found recurring violations unlikely. Amazon and the FTC appealed to the U.S. Court of Appeals for the Ninth Circuit.

The FTC has brought several such actions against big tech companies regarding in-app purchases allegedly made by children without their parents’ consent. Apple Inc. and Alphabet Inc.'s Google settled with the FTC over similar charges in 2014, resulting in refunds to consumers totaling more than $50 million, according to the commission.

The decision to end the litigation against Amazon paves the way for affected consumers to seek refunds from the company, the FTC said in a statement. The district court had stayed its order requiring Amazon to offer refunds while the appeals were pending.

“This case demonstrates what should be a bedrock principle for all companies—you must get customers’ consent before you charge them,” Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection, said in the statement.

An Amazon spokesperson didn’t immediately respond to a request for comment.

To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The motion for voluntary dismissal is available at http://src.bna.com/nDH.

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