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Amazon Fights Government Over In-App Purchases

6 Jul, 2014 By: Chris Tribbey

In January, Apple settled a Federal Trade Commission (FTC) complaint regarding its standards for in-app purchases, paying $32.5 million in refunds to consumers and changing its billing practices to require a password for purchases.

In March, Google followed suit, giving users the option to have a password required for every app or in-app purchase.

However, according to a letter sent to the FTC, Amazon isn’t going to play ball and change its policies regarding in-app purchases, not without a fight. The FTC said it’s ready to file a complaint against Amazon regarding how children can run up purchases using the company's apps, which was at the center of the FTC complaint against Apple and a lawsuit against Google.

In a July 1 letter to FTC chair Edith Ramirez, Amazon lawyer Andrew DeVore argues that the FTC set an unfortunate precedent with its Apple complaint, and that Amazon’s one-click in-app purchasing option is neither illegal nor an attempt to take advantage of consumers.

“The main claim in the [FTC’s] draft complaint is that we failed to get customers’ informed consent to in-app charges made by children and did not address that problem quickly or effectively enough in response to consumer complaints,” the letter reads. “We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn’t want we refunded those purchases.”

Since it began offering apps, Amazon argues, the company’s in-app purchasing experience has been “responsible, customer-focused, and lawful, including prominent notice of in-app purchasing, effective parental controls, real-time notice of every in-app purchase, and world-class customer service.”

Amazon says its in-app purchasing experience already meets the requirements of the FTC’s Apple consent order, and that the company is “aligned with the [FTC’s] goals.”

“Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense, and is an unfortunate misallocation of the [FTC’s] resources,” Amazon’s letter reads.

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