Apple has agreed to pay out $32.5 million to settle a Federal Trade Commission (FTC) complaint that it made a fortune in “charges incurred by children in kids’ mobile apps without their parents’ consent.” Games including Tap Pet Hotel, Dragon Story, and Tiny Zoo Friends, whose charges sometimes ran into the thousands, were cited in the original suit.
The FTC voted 3-1 to accept the refund action, with Commissioner Maureen K. Ohlhausen noting in her statement that by March 2011 “consumers had submitted more than ten thousand complaints to Apple stating that its billing platform for in-app purchases for children’s apps was failing to inform them about what they were being billed for a when.” A dissenting opinion from Commissioner Joshua D. Wright argued that the case involved “a miniscule percentage of consumers—the parents of children who made purchases ostensibly without their authorization or knowledge,” very nearly implying that iPad owners with kids ought to know better.
Apple CEO Tim Cook lamented the outcome but appeared to accept it as inevitable in an internal memo published by 9to5Mac: “It doesn’t feel right for the FTC to sue over a case that had already been settled,” he wrote to employees, alluding to the company’s prior effort to refund the contested purchases, which a federal judge had agreed constituted a full settlement. “To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.”
In other words: Is it really worth saving a few million bucks only to spend it waging war on a bunch of angry parents? Apart from the refunds—and if you want your money back after making some dumb Temple Run 2 purchases, you’ll have to blame a kid—Apple has also agreed to “modify its billing practices to ensure that Apple obtains consumers’ express, informed consent prior to billing them for in-app charges” and allow them to withdraw consent at any time. So get ready to click through a lot more user agreements without reading first. Great.
Photo by Paul Emerson/Flickr