{"id":2292,"date":"2014-01-16T16:51:12","date_gmt":"2014-01-16T16:51:12","guid":{"rendered":"http:\/\/ncjolt.org\/?p=2292"},"modified":"2020-06-04T20:53:57","modified_gmt":"2020-06-04T20:53:57","slug":"tech-savvy-kids-costs-apple-millions-forces-change-in-itunes-billing-practices","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/tech-savvy-kids-costs-apple-millions-forces-change-in-itunes-billing-practices\/","title":{"rendered":"Tech-Savvy Kids Costs Apple Millions, Forces change in iTunes Billing Practices"},"content":{"rendered":"

 
\nWhen you start having to key in your length iTunes password for every, individual purchase, you now know who to blame.\u00a0 Following the conclusion of a three year investigation into Apple\u2019s billing practices, the Federal Trade Commission announced yesterday that Apple will be paying at least $32.5 million<\/a> to settle complaints over children racking up purchases in iPhone app games.\u00a0 This move is in addition to an earlier settlement Apple came to last Summer<\/a>, wherein they agreed to refund parent with iTunes credit, or cash, provided the parent could prove their kids made the purchase without their knowledge.<\/p>\n

Following the conclusion of a three year investigation into Apple\u2019s billing practices, the Federal Trade Commission announced yesterday that Apple will be paying at least $32.5 million to settle complaints over children racking up purchases in iPhone app games.<\/p><\/blockquote>\n

Both actions were in response to an outcry from parents who received startling credit card statements in the mail, claiming they owed hundreds of dollars in in-app payments to Apple for well-known games like Angry Birds and Smurf\u2019s Village.\u00a0 The culprit?\u00a0 Not Apple, but the sweet-children of the phone\u2019s owners themselves.\u00a0\u00a0 The tech-savvy tykes had apparently stumbled onto the fact that after the user\u2019s password had been entered, say to install a free or $1 game like Angry Birds or Smurf Village, the iTunes Store then allowed unlimited purchases for a 15-minute period<\/a>.\u00a0 And with iTunes\u2019 convenient access to stored credit card information, the kids did quite a bit of damage in that brief window.\u00a0 One child spent north of \u00a34,000<\/a>, around $6500.\u00a0 While other children were enticed to buy virtual coins, smurf-berries in Smurf Village, for as much as $500 an item.
\nTo Apple\u2019s credit, they did respond with the aforementioned settlement offer to the parents.\u00a0 But this wasn\u2019t good enough for the FTC, a fact that some Apple upper-management have taken umbrage with<\/a>. Chief Apple Executive Tim Cook said the deal \u201csmacked of double jeopardy,\u201d but that the company did not choose to fight the FTC because their proposed sanctions did not require them to do \u201canything they weren\u2019t already going to do,\u201d in reference to the Summer-settlement.
\nWith respect to Mr. Cook, this isn\u2019t true, as the FTC\u2019s settlement of $32.5 million puts a definite figure on the more nebulous refund policy, and is only a minimum value. The FTC Chair, Edith Ramirez clarified<\/a> that unlike the Summer-settlement the FTC deal requires full customer repayment.\u00a0 In effect this means that the FTC has only put a $32.5 million floor on Apple\u2019s liability. If consumers do not submit $32.5 million within 12 months of the deal\u2019s finalization, Apple would remit the remainder of the total to the FTC.
\nThis minimum refund is accompanied by mandatory changes to the iTunes billing policy to ensure Apple has their customer\u2019s consent prior to billing them for all in-app purchases.\u00a0 And was hailed<\/a> by Ms. Ramirez as a \u201cvictory for consumers harmed by Apple\u2019s unfair billing,\u201d and a strong signal that \u201cyou cannot charge consumers for purchases they did not authorize.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

  When you start having to key in your length iTunes password for every, individual purchase, you now know who to blame.\u00a0 Following the conclusion of a three year investigation into Apple\u2019s billing practices, the Federal Trade Commission announced yesterday that Apple will be paying at least $32.5 million to settle complaints over children racking …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/2292"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=2292"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/2292\/revisions"}],"predecessor-version":[{"id":7529,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/2292\/revisions\/7529"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=2292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=2292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=2292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}