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发帖数: 1034 | 1 July 10, 2014 10:45 AM
Richard Byrne Reilly
The Feds are going after Amazon.
The Federal Trade Commission said Thursday morning that the online retail
kingpin unlawfully billed parents for millions of dollars in unauthorized
app purchases made by children. And now the feds want Amazon to return the
money.
The FTC filed suit in federal court this morning, alleging that no parental
consent or passwords were required for kids to buy apps from Amazon’s app
store. That’s a violation of federal law. During a press conference in
Washington DC this morning, the FTC’s consumer protection director Jessica
Rich laid out the governments case.
“Many millions were spent on unauthorized charges. This is about the age
old principle of consumer protection. We plan to obtain refunds and put it
back in consumer’s pockets,” Rich said.
“We’re now headed to court,” she said.
Rich blasted Amazon for willfully knowing about the illegal practice and not
doing anything about until the feds came calling. The FTC said they were
approached by many consumers who complained about the unauthorized charges.
Rich declined to say how many people complained or when the investigation
started.
She called on Amazon to incorporate safeguards so the alleged practice doesn
’t happen again. She said that for over two years, Amazon operated without
informed consent, meaning they comported themselves illegally when it came
to the unauthorized purchases.
While many have come forward to the feds, many more likely have no idea they
were taken. Rich urged those who believe they were hoodwinked to contact
the FTC.
“If you feel you’ve been had and want a refund contact the FTC,” she said.
In fact, in their suit, the feds are requiring Amazon to set up a process to
refund clients wrongly billed.
More details of the suit will come out as the case wends itself through the
federal court system, Rich said.
The FTC said Amazon keeps 30 percent from all app purchases made on its
store. That’s the same percentage charged by Apple for its store as well.
“Amazon’s in-app system allowed children to incur unlimited charges on
their parents’ accounts without permission,” said FTC chairwoman Edith
Ramirez.
“Even Amazon’s own employees recognized the serious problem its process
created. We are seeking refunds for affected parents and a court order to
ensure that Amazon gets parents’ consent for in-app purchases,” Ramirez
said.
According to the FTC:
“Amazon offers many children’s apps in its appstore for download to
mobile devices such as the Kindle Fire. In its complaint, the FTC alleges
that Amazon violated the FTC Act by billing parents and other Amazon account
holders for charges incurred by their children without the permission of
the parent or other account holder. Amazon’s setup allowed children playing
these kids’ games to spend unlimited amounts of money to pay for virtual
items within the apps such as “coins,” “stars,” and “acorns” without
parental involvement.”
In its action, the FTC obtained internal Amazon communications between
employees going back to December 2011 that disclosed that some workers were
concerned that allowing unlimited in-app charges without passwords could
come back to bite the company. And it did.
The FTC, in a release, quoted one such internal communication. Not using
passwords for app purchases “was clearly causing problems for a large
percentage of our customers,” read one email.
Another email read the situation was a “near house on fire.”
The feds’ case against Amazon is considerable. It appears the investigation
goes back at least two years, as the FTC is quoting internal documents from
that long ago.
FTC spokesman Jay Mayfield deferred all questions to Rich’s press
conference.
“It’s much easier to get upset about Amazon letting your child purchase a
$99 product without any password protection than a $20 product,” the FTC
quoted an Amazon employee as saying.
The “house on fire” quote suggests, at least to the feds, that multiple
Amazon employees knew what was going on inside the company — and were
cognizant they had a big problem on their hands. And they were right.
The complaint also said that:
“In March 2012, according to the complaint, Amazon updated its in-app
charge system to require an account owner to enter a password only for
individual in-app charges over $20. As the complaint notes, Amazon continued
to allow children to make an unlimited number of individual purchases of
less than $20 without a parent’s approval. In July 2012, as set forth in
the complaint, internal emails again described consumer complaints about in-
app charges as a “house on fire” situation.”
By June, the FTC felt it had enough in its arsenal to unveil the suit.
Stay tuned, as we’ll be covering this story throughout the day. |
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