Apple Pointed Finger at Google, While Cooperating With FTC

 
 
By Michelle Maisto  |  Posted 2014-07-10 Email Print this article Print
 
 
 
 
 
 
 
Apple in-app purchases

Apple agreed to reimburse $32.5 million to customers for inadvertent in-app purchases, while nudging the FTC to make Google do the same.

While Apple was willing to set things right with customers, it wasn't content to take the blame alone, according to a new report.

Apple, in April, began the process of refunding $32.5 million to consumers who had unknowingly made in-app purchases—many of which occurred after the iPhone or iPad was handed to a child. The move followed a January settlement between Apple and the Federal Trade Commission (FTC), which had said in a complaint that Apple violated the FTC Act by failing to make clear to parents that after they entered their Apple ID, a 15-minute window was left open during which purchases could be made without the retry of their passwords.

While seeing to the details of the settlement in January, Apple General Counsel Bruce Sewell also tapped out letters to FTC Chairwoman Edith Ramirez and Commissioner Julie Brill; Sewell pointed out that consumers also have a beef with unauthorized purchases in Android apps, Politico reported July 9.

"I thought this article might be of some interest," Sewell said in the letter, pointing to a report that criticized Google for the same practice. Politico received the letter through a request via the Freedom of Information Act.

The FTC hasn't yet publically pursued the matter with Google, though it has gone after Amazon. The FTC has drafted a lawsuit against the mega-retailer, regarding unauthorized purchases made by children; Amazon rejected the charges, the Associated Press reported July 3.

According to the report, Amazon told the FTC's Ramirez that Amazon refunds purchases that parents say were unknown to them, that its parental controls go beyond what the FTC requires, and that if the FTC continues to pursue the matter, Amazon is ready to go to court to defend itself.  

Not Playing Nice

The FTC has for years been keeping an eye on applications designed for kids. In late 2012, it released a report on its study of how the 400 most popular children's apps in Apple's and Google's stores disclosed their privacy practices.

"Most apps failed to provide any information about the data collected through the app, let alone the type of data collected, the purpose of the collection and who would obtain access to the data," said the FTC, warning companies that they "expect to see improvements."

Earlier this year, the European Commission addressed Apple and Google together when it called for the mobile industry to be smarter and more open about the "freemium" model of applications for kids.

"Coming up with concrete solutions as soon as possible will be a win-win for all," EC Commissioner Neven Mimica said in a statement at the time.

In letters sent to the FTC, parents complained about their kids racking up in-app purchases in the hundreds and even thousands of dollars. One girl added $2,600 in charges to her mother's credit card by playing a game called "Tap Pet Hotel."

'Double Jeopardy'

While Apple settled with the FTC in January, it wasn't happy about it, as the company had made numerous improvements to its in-app purchase policies, including adding new controls for parents, and had spent the previous year trying to refund any in-app purchases that had been made without a parent's permission, according to a company-wide memo Tim Cook sent out Jan. 15, Re/Code reported.

According to the report, in 2013 Apple emailed 28 million App Store customers—everyone who had made an in-app purchase in a children's app—and sent postcards to the people whose emails bounced back.

"A federal judge agreed without actions as a full settlement and we felt that we had made things right for everyone," Cook reportedly wrote. "It doesn't feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy."

The letter didn't state whether Apple had already reimbursed customers, but added that the FTC wasn't requiring Apple to do anything "we weren't already going to do, so we decided to accept it."

Follow Michelle Maisto on Twitter.

 
 
 
 
 
 
 
 
 
 
 

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