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Apple to pay $32.5M in refunds to settle in-app purchases lawsuit

updated 01:12 pm EST, Wed January 15, 2014

App Store loopholes must be closed by April

Apple must pay out at least $32.5 million in refunds to settle a lawsuit brought by the US Federal Trade Commission over in-app purchases, the two parties have announced. Apple's CEO, Tim Cook, states in a memo to workers that while it "doesn't feel right for the FTC to sue over a case that had already been settled" -- something he calls "double jeopardy" -- 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."

A number of parents have complained, through lawsuits or otherwise, that the App Store made it too easy for their children to buy in-app content without permission. For some time, the App Store allowed password-free purchases within a 15-minute window of an original purchase. This created a scenario in which a parent might download an app for their child, walk away, and later owe hundreds or thousands of dollars. The situation was compounded by some game developers knowingly deceiving kids about whether or not items would cost real-world currency or just virtual points.

The Cook memo says that Apple has received 37,000 claims of illegitimate purchases, and is in the process of refunding cash. Under the terms of the settlement, Apple must close App Store loopholes by March 31st, and pay the $32.5 million in refunds within a year. The company could owe more depending on the complaints received.

By Electronista Staff
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  1. sixcolors

    Fresh-Faced Recruit

    Joined: 10-23-01

    IAP was always a wretched hive of scum and villainy!

  1. Flying Meat

    Junior Member

    Joined: 01-25-07

    This just puts a legal requirement on it. Clears things up a bit for handling this sort of thing. Tim Cook is doing the right thing by recognizing the reality of the situation.

  1. nouser

    Fresh-Faced Recruit

    Joined: 04-29-12

    And the lazy parents have no responsibility for supervising their kids? Laughable.

  1. coffeetime

    Junior Member

    Joined: 11-15-06

    Yeap, in-app purchasing is getting tricky these days. You don't know if it's virtual coins or real money it's deducting and kids don't know any better. First app always requires password but some in-app purchases do not. Happening a few times to my kid but luckily it was an Apple Gift Card that I refilled on needed bases in order to put a cap on his purchases. This is a sticky situation from Apple to monitor when the deduction is hidden inside the app.

  1. Grendelmon

    Dedicated MacNNer

    Joined: 12-26-07

    Originally Posted by nouserView Post

    And the lazy parents have no responsibility for supervising their kids? Laughable.

    Yup, this is 100% all on the parents, huh. Apple, the game publishers and the entire ecosystem can do no wrong with in-app purchases.

    Back in reality, Flying Meat is correct. Apple has finally recognized that this is a small (only 37,000 complaints) problem.

    All they have to do is disable the 15 minute rule BY DEFAULT. Problem solved.

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