A lawsuit that was accusing Amazon.com, Inc. (NASDAQ:AMZN) of having billed customers for unofficial in-app purchases made by their children has been settled. The acting director of the Federal Trade Commission FTC, the US regulator, Thomas B. Pahl says that Amazon will be making refunds to all the affected consumers.
The settlement in which the online retailer will part with a pool of around $70 million has come forth after three years of legal battle. The said inappropriate purchases were made between November 2011 and May 2016. An earlier request by Amazon to repay the purchases in the form of gift cards or online credits was rejected and instead, the company was asked to take responsibility for its actions.
The issue had to do with the designing of Amazon’s Appstore in-app purchasing system
The origin of the problem has everything to do with Amazon’s Appstore in-app purchasing system. Every Amazon mobile devices come with a preloaded Amazon Appstore. The use of these devices the likes of Kindle Fire tablets especially by kids grows the curiosity in them to a point of buying unauthorized things. This can, however, be prevented through the use of passwords but apparently, Amazon’s Appstore did not have such for in-app purchases.
Amazon has been upgrading the system from time to time with the introduction of password-protected in-app purchases in March 2012. However, it had been overtaken by the events of the unauthorized purchases.
Pahl says, “This case demonstrates what should be a bedrock principle for all companies — you must get customers’ consent before you charge them.”
But Amazon is not the only victim of such predicaments
Amazon and the FTC have now agreed to end their litigation as the refund process begins. However, such cases are not new because other tech firms; Apple Inc.(NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL) Google have been victims of circumstance. In 2014, Apple was put on the spot to over its App Store and was forced to refund more than $32 million to users. Around the same time, the search giant was making a refund of $19 million to affected Play Store customers.