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Apple Reaches Agreement with FTC on In-App Purchase System
Apple has settled with the Federal Trade Commission (FTC) over concerns about its in-app purchase system in iOS applications, according to a letter from Tim Cook to employees obtained by 9to5Mac. The settlement marks the end of a long-standing issue that had raised questions about Apple’s handling of in-app purchases and its ability to protect children from making unauthorized charges.
Background on the Issue
In-app purchases have been a contentious issue for years, with many parents complaining that their children were able to make unauthorized purchases without their consent. The issue came to a head in 2011 when a group of parents banded together to demand refunds for in-app purchases made by their children. Apple eventually agreed to refund the affected customers, but the issue remained a point of contention between the company and regulators.
The FTC’s Investigation
In response to the growing concerns about in-app purchases, the FTC launched an investigation into Apple’s practices. The agency found that Apple had not adequately disclosed the terms and conditions of its in-app purchase system, including the 15-minute window during which passwords were not required after initial entry.
Terms of the Settlement
As part of the settlement, Apple has agreed to pay out a minimum of $32.5 million in refunds to users who have complained about charges made by their children via in-app purchases without the necessary approval of their parents. The company must also implement a new warning system for in-app purchases across all types of apps that contain them.
New Warning System
The new warning system will inform parents of the 15-minute window during which passwords are not required after initial entry. This change is designed to prevent massive accidental charges, such as those listed in the complaint against Apple.
Implementation Timeline
Apple must send out emails to customers who might have been affected by unauthorized charges made by minors, with detailed instructions on how to obtain a refund. The public has until February 14 to make any comments on the settlement before it is finalized.
Key Takeaways
- Apple has agreed to pay out $32.5 million in refunds to users who have complained about charges made by their children via in-app purchases without the necessary approval of their parents.
- The company must implement a new warning system for in-app purchases across all types of apps that contain them.
- The public has until February 14 to make any comments on the settlement before it is finalized.
Conclusion
The settlement between Apple and the FTC marks an important step forward in addressing concerns about in-app purchases and protecting children from making unauthorized charges. By implementing a new warning system and paying out refunds, Apple is demonstrating its commitment to transparency and fairness in its business practices.
Additional Resources
Related Topics
- In-app purchases
- FTC
- Apple
- Consumer protection
About the Author
Darrell Etherington is an editor at large for TechCrunch, covering space, science, and health tech. He has previously covered automotive and mobility tech, and was formerly an employee of both Apple and Shopify.
