Apple Sued by Dad over In-App Purchases Policy

Apple has been sued by Pennsylvania dad Garen Meguerian, whose daughter purchased in-app content totaling $200 without his knowledge, due to Apple password policies.

Apple is being sued by Pennsylvania man Garen Meguerian, whose 9-year-old daughter, using an iPod Touch, racked up $200 in fees playing "Zombie Caf??«," "Treasure Story" and "City Story"-three games that are free to download from the Apple App Store.

The lawsuit, filed April 11 in a Northern District of California Court, accuses Apple of a breach of contract and "garnering millions of dollars of ill-gotten gains" by targeting at children games that are advertised as free.

The highly readable class-action suit explains that the games are "highly addictive, designed deliberately so, and tend to compel children playing them to purchase large quantities of Game Currency"-items such as virtual supplies, ammunition, or fruits and vegetables that the games' characters can use to help further their tasks-"amounting to as much as $100 per purchase or more."

The lawsuit goes on to explain that Apple requires users to authenticate their accounts by entering a password once prior to downloading the game or purchasing Game Currency, but Game Currency can then be purchased for 15 minutes without re-entering the password.

"This practice enabled minors to buy Game Currency, in one click sums of $99.99 or more, without entering a password, causing Apple to pocket millions of dollars from such Game Currency transactions with minors and without the authorization of their parents, whose credit cards or PayPal accounts are automatically charged for the purchases," the lawsuit states.

Earlier this year, it also notes, the Federal Trade Commission was urged to review Apple's marketing practices regarding such applications.

"I am concerned about how these applications are being promoted and delivered to consumers, particularly with respect to children, who are unlikely to understand the ramifications of in-app purchases," U.S. Rep. Edward J. Markey, a Democrat from Massachusetts, wrote to FTC Chairman Jon Leibowitz, the Washington Post reported Feb. 8.

Markey added in a public statement, "Companies shouldn't be able to use Smurfs and snowflakes and zoos as online ATMs, pulling money from the pockets of unsuspecting parents. The use of mobile apps will continue to escalate, which is why it is critical that more is done now to examine these practices. I will continue to closely monitor this issue and look forward to the FTC's response."

Apple's 15-minute purchase window was implemented after the "FTC was about to commence an investigation into Apple's improper sales practices. Even after this change," the lawsuit goes on, "Apple continues to sell Game Currency to minors. Minors 13 and older are permitted to open their own Apple accounts, and minors younger than 13 may purchase Game Currency by using their parents' general Apple password."

Apple does, the lawsuit acknowledges, include a warning next to the Install button of the app explaining that the games are free to play but charge real money for adding in-app content. Apple also advises that users "may lock out the ability to purchase in-app content by adjusting your device's settings"-an option Meguerian and the other parents and guardians, whom the suit is also filed on behalf of, apparently didn't note or chose to ignore.

Apple has offered no official response to the lawsuit.