Apple has opted to settle a case with the U.S. Federal Trade Commission rather than engage in a "long legal fight." The settlement will force Apple to refund customers at least $32.5 million over long-standing complaints over in-app purchases made by children without their parents' consent or permission.
According to the BBC News, Apple will also be required to change its billing procedures in order to make sure customers have given consent before they are charged for any purchases made within applications.
"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," said FTC Chairwoman Edith Ramirez in a statement. "You cannot charge consumers for purchases they did not authorize."
The FTC complaint alleges that Apple failed to inform parents that by entering a password they were approving a single in-app purchase and also 15 minutes of additional unlimited purchases their children could make without consent as well.
The company was also accused of presenting a password prompt screen for parents to enter their details without explaining that this would finalize any purchases made within that app. This led to many thousands of people complaining about children making extravagant purchases without their parents permission. One woman said her daughter spent $2,600 in one app.
The changes that Apple has to make must be in place by March 31. According to an internal e-mail at Apple, picked up by 9to5Mac, CEO Tim Cook said the changes are in line with the company's intentions anyway. "The consent decree the FTC proposed does not require us to do anything we weren't already going to do, so we decided to accept it rather than take on a long and distracting legal fight," he wrote. "We wanted to reach every customer who might have been affected, so we sent emails to 28 million App Store customers - anyone who had made an in-app purchase in a game designed for kids."
