Apple will pay at least $32.5 million in refunds to parents whose children made in-app purchases without their consent after a settlement with the Federal Trade Commission (FTC).
The refund agreement settles long-standing complaints over in-app purchases made by children without their parents’ consent.
Apple will also be required to change its billing procedures to make sure customers have given consent before they are charged for in-app purchases.
The company said it had settled rather than take on a “long legal fight”.
“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.”
Apple will pay at least $32.5 million in refunds to parents whose children made in-app purchases without their consent
The FTC’s complaint alleged 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 further consent.
It also said that Apple often presented a password prompt screen for parents to enter their details without explaining that this would finalize any purchase made in the app.
The FTC also noted that Apple received at “least tens of thousands of complaints” about unauthorized in-app purchases by children.
This refund settlement only covers customers who have made purchases through Apple’s US app store.
The changes to Apple’s billing process, which means express consent must be obtained before in-app charges are made, must be in place by March 31, said the FTC.
Apple’s App Store offers many games for children, a large number of which allow in-app purchases to be made. These purchases can include virtual items or currency, and typically allow faster progression in the game.
In-app purchases can range in cost – from 99 cents to just under $100.
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The US Federal Trade Commission (FTC) has decided not to take legal action against Google at the end of a 19-month investigation into the search giant.
The FTC found Google had not biased its search results to favor its products.
Google has agreed to give advertisers access to more information about their campaigns and has agreed not to use other providers’ material such as product reviews in its search results.
Google is still awaiting a competition ruling from the European Commission.
Another key concession applies to how Google uses the patents it bought when it acquired Motorola Mobility last year for $12.5 billion.
Google has said it will charge “fair and reasonable” rates to companies that need to use its standard essential patents.
Standard essential patents are ones that are critical to industry standards, for example, the technology that allows devices such as smartphones and tablets to connect to the internet over Wi-Fi.
It has agreed not to take out injunctions forcing licensees to remove their products from sale if there are disagreements about how much a fair rate should be.
Rivals had called for stronger sanctions to be taken against Google.
Fairsearch, an organization representing several of Google’s critics such as Microsoft, said in a statement: “The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results.”
The FTC was asked to investigate whether Google was favoring its own products in search results.
Google has agreed to give advertisers access to more information about their campaigns and has agreed not to use other providers’ material such as product reviews in its search results
FTC chairman Jon Leibowitz told a press conference that the commission had found no evidence that Google’s search engine was biased towards its own services.
“Some may believe the commission should have done more, but for our part we do follow the facts where they lead,” he said.
“We do it with appropriate rigor. This brings to an end the investigation. It is good for consumers, it is good for competition and it is the right thing to do.”
One of the biggest changes to be implemented by Google will allow advertisers to copy ad campaign data to other search engines, such as Microsoft’s Bing.
Google is also promising that it will stop copying content from other websites to use in its summaries, even though the company had insisted the practice was legal under the fair-use provisions of US copyright law.
In response to the settlement, Google’s chief legal officer David Drummond said in a blog post: “The US Federal Trade Commission today announced it has closed its investigation into Google after an exhaustive 19-month review that covered millions of pages of documents and involved many hours of testimony.
“The conclusion is clear: Google’s services are good for users and good for competition.”
It does not mean that the search giant is out of the woods on the issue of anti-competitive practices.
Alongside the FTC investigation, Google is still under scrutiny from the European Union.
In December, the EU’s Competition Commission gave the search giant a month to address four key areas:
- the manner in which Google displays “its own vertical search services differently” from other, competing products
- how Google “copies content” from other websites – such as restaurant reviews – to include within its own services
- the “exclusivity” Google has to sell advertising around search terms people use
- restrictions on advertisers from moving their online ad campaigns to rival search engines
Google is expected to respond to these concerns shortly.
If found guilty of breaching EU anti-trust rules, Google would face a fine of up to $4 billion.
Google Inc. has been fined $22.5 million by the U.S. Federal Trade Commission (FTC) for ignoring the privacy settings of customers using Apple’s Safari browser.
The staggering sum would be the largest penalty ever levied on a single company by the FTC.
But, with Google reporting a net income of $2.89 billion in the first quarter of this year, it would take just over 17 hours for the company to earn the amount to pay off the fine.
The fine was first reported by the Wall Street Journal, which cited officials briefed on the settlement terms.
Google has been fined $22.5 million by the FTC for ignoring the privacy settings of customers using Apple's Safari browser
The charges involve Google’s use of special computer code, or “cookies”, to trick Apple’s Safari browser so Google could monitor users that had blocked such tracking, the newspaper said.
The tracking, which occurred on computers and iPhones, would have allowed the search engine to collect information on users’ preferences and search choices.
But Google disabled the code after being contacted by the Wall Street Journal, which first covered the story in February.
Staff at Google told the publication that tracking Apple users was inadvertent and did not cause any harm to consumers.
“The FTC is focused on a 2009 help center page. We have now changed that page and taken steps to remove the ad cookies,” Google said.
But the company’s practices sparked an investigation by the Trade Commission into whether it had violated an agreement signed last year.
In the 20-year agreement, Google said it would not misrepresent its privacy practices to users, the Wall Street Journal reported.
The penalty for violating this agreement is $16,000 per violation per day.
The code was spotted by Stanford researcher Jonathan Mayer. Advisers agreed that scores of ads on websites installed the tracking code.
Google also faces potential sanctions from other governments. It is being investigated by the European Union to determine if the company complies with Europe’s stricter privacy laws, the Wall Street Journal reported.