Amazon to begin refund $70m of in-app purchases made by children

Amazon will begin the refund process for more than $70m (£56m) in-app purchases made by children.

The Federal Trade Commission (FTC) and Amazon have reached an agreement to end an appeal related to last year's court findings that the Seattle-based company had billed consumers for unauthorised in-app purchases made by children.

The decision to end the legal battle would allow Amazon to begin the refund soon. The FTC says the in-app purchases were made between November 2011 and May 2016. Amazon will provide more details about the refund programme shortly.

Thomas B Pahl, acting director of the FTC's Bureau of Consumer Protection, in a statement issued on 4 April said: "This case demonstrates what should be a bedrock principle for all companies — you must get customers' consent before you charge them."

"Consumers affected by Amazon's practices can now be compensated for charges they didn't expect or authorise," said Pahl.

Last April, a federal district court found that Amazon received many complaints about the in-app charges by children, citing the fact that the disclosures about the in-app charges within free apps were not sufficient to inform consumers about the charges.

The court, in the same ruling, denied the FTC's request for an injunction that would have prevented Amazon from similar conduct in future. The FTC then appealed against the denial order, with Amazon cross-appealing against the court's ruling that it had violated the law.

The FTC originally filed a complaint against Amazon in July 2014 claiming the company had billed parents and other account-holders for millions of dollars in unauthorised in-app purchase made by children. The complaint stated that Amazon keeps 30% of all in-app charges.

The FTC lawsuit sought a court order requiring Amazon to refund consumers for the unauthorised charges and also banning it from billing parents for in-app purchases without their consent.

The FTC had filed similar cases against Apple and Google related to unauthorised in-app charges made by children, requiring the companies to refund the consumers.