US Government Sues Amazon Over Children's In-App Purchases

The US government is suing Amazon for allowing children to make unauthorised in-app purchases which led to kids running up large bills to the horror of their parents.

In its complaint, the Federal Trade Commission (FTC) specifically mentions an app called Tap Zoo in which children use "coins" and "stars" to acquire "animals, habitats and staff to populate a virtual zoo". However, sometimes these purchases cost real money, as opposed to the in-game virtual currency.

Amazon refused to settle so the FTC is taking it to court, seeking full refunds for the parents as well as "permanently banning the company from billing parents and other account holders for in-app charges without their consent".

The e-commerce trader's old rules stipulated that purchases did not require a password and there were limited practices in place to give parents full jurisdiction over in-app purchases.

Amazon first introduced in-app purchases in 2011, but a password was not necessary for acquisitions that cost up to £58 (€71, $99).

In 2012, Amazon set a password threshold for purchases over £11.60.

Although it has now updated this procedure, the FTC said that there was a period of time last year when children were still allowed to make purchases without their parents' consent.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC Chairwoman Edith Ramirez.

"Even Amazon's own employees recognised the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."

Apple was in hot water for a similar stunt, but it moved to quickly rectify the situation and settled on an out-of-court agreement of £19m in customer refunds.