The Federal Trade Commission (FTC) is suing Amazon.com for offering children the option to make in-app purchases without parental consent.
Earlier this month, Amazon announced that it is prepared to fight the federal agency in case it requires them to pay penalties regarding the in-app purchases made by children. The agency previously urged Amazon to change their policies to prevent these unauthorized in-app purchases.
In January, Apple paid at least $32.5 million to refund their customers. The company also updated its billing rules to ensure that parents can monitor and authorize the purchases made by their children. The FTC wanted Amazon to do the same.
FTC officially filed a lawsuit on Friday asking Amazon to pay millions of dollars in refunds to families affected by the unauthorized purchases which began in 2011. It also wanted the court to ban Amazon from charging parents with unauthorized purchases.
While Amazon CEO Jeffrey P. Bezos did not immediately respond, a letter from a spokeswoman said that the news was "deeply disappointing."
Amazon argued that they should not be responsible for such issues, citing a disclosure in the app store stating "prominent notice of in-app purchasing, effective parental controls and real-time notice of every in-app purchase."
The FTC maintained that Amazon made some violations since launching its app store in November 2011 by billing parents for unauthorized purchases by children. Children were able to make these purchases because there were no password requirements prior to the policy change in 2012.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," FTC chairwoman Edith Ramirez told the Washington Post.
"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," she added.
Despite the policy change in 2012 which requires passwords for purchases worth $20 and above, complaints from users continued piling up so the FTC decided to act on it by filing the lawsuit.
