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Amazon warns FTC it will take battle over in-app purchases to court

updated 06:50 pm EDT, Wed July 2, 2014

Letter to the FTC says news of a possible complaint filing is 'deeply disappointing'

Amazon has decided to take a hard line against the Federal Trade Commission's (FTC) pressure to change their approach to in-app purchases. In a letter to the commission, the company stated that it would defend its "customer-centric approach" if the FCC pursued a complaint in Federal court. The government agency is considering suing Amazon over what it calls lax practices to prevent any possibility of unauthorized buying of in-app purchases (IAPs), for example by children.

The FTC is looking for Amazon to settle the in-app purchase matter in a fashion similar to Apple, which both offered refunds for genuine cases of unauthorized IAP purchases as well as instituted measures to prevent fraudulent or inadvertent charges. General Counsel for Amazon Andrew C. DeVore sent a letter to FTC Chair Edith Ramirez, explaining that Amazon will not be forced into a deal over in-app purchases like Apple.

At the beginning of the year, Apple settled with the FTC, agreeing to pay out $32 million in refunds to more than 37,000 customers. The deal also required Apple to change billing and record collection practices.

The letter, obtained by The Verge, was drafted after Amazon received news that the FTC was granted permission to file a complaint against the company in Federal district court over its practices. Amazon officials thought negotiations on the matter were moving forward after it held meetings with the commission, only to find out that the agency had sought permission to pursue legal recourse.

"It's an understatement to say that this response is deeply disappointing," said DeVore. "The Commission's unwillingness to depart from the precedent it set with Apple, despite our very different facts, leaves us no choice but to defend our approach in court."

Amazon believes that it's doing enough to curb unwanted purchases through apps, keeping a policy that allows customers to request a refund. The issue at hand revolves around the idea of not obtaining informed consent to purchase, especially when it comes to children. DeVore maintains that Amazon has constantly improved the experience, offering refunds as far back as 2011. From real-time notifications, highlighted apps and parental controls, Amazon says it meets the requirements set forth in the Apple case.

DeVore closes the letter by stating that Amazon's goals align with the FTC's over customer treatment. However, it's "an unfortunate misallocation of the Commission's resources" if it pursues actions against the online retailer's practices.

By Electronista Staff
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  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    "...keeping a policy that allows customers to request a refund."
    That's not enough, Amazon. Apple allowed customers to request a refund too. The point is that developers are making money off of in app purchasing practices that intentionally obfuscate that the user is making an actual purchase with real money. As this is a known issue you will need to comply with consumer protection regulation as it is currently, and as it is leveled. Allowing customers to "request a refund" is indeed the least you can do on that front. ...unless it's against your corporate religious beliefs to protect your customers from such predatory products, then you might just win that one.

  1. shawnde

    Fresh-Faced Recruit

    Joined: 04-01-08

    Amazon will win in court .... they practically own the US Government, and their sensitive data (stored on AWS) .... they also own the DOJ and Wall Street .... that's A LOT of powerful friends .... In perspective, the FTC is a puny organization. Amazon will just crush them.

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