1. US judge orders Amazon to reimburse consumers for in-app purchases by children

US judge orders Amazon to reimburse consumers for in-app purchases by children

In what may be seen as a respite to many parents in the United States (US) by the virtue of a district judge John Coughenour who after Six months of assessment have ordered Amazon.com to reimburse parents whose children made unauthorised in-app purchases without the permission of the parents.

By: | New Delhi | Published: November 11, 2016 5:56 PM
Amazon to reimburse for unauthorised in-app purchases (Reuters) Amazon to reimburse for unauthorised in-app purchases (Reuters)

In what may be seen as a respite to many parents in the United States (US) by the virtue of a district judge John Coughenour who after Six months of assessment have ordered Amazon.com to reimburse parents whose children made unauthorised in-app purchases without the permission of the parents. The judge directed Amazon.com Inc to set up a year-long process to reimburse parents but rejected a request for a $26.5 million lump sum amount made by a US regulator. Coughenour found the online retail giant liable in a case brought by the Federal Trade Commission (FTC).

It is no secret that children in the US are game freaks and can go to any extent to make their game more exciting. TO activate several features of games in-app purchases are required on mobile devices. Games such as “Pet Shop Story” and “Ice Age Village,” resulting in an estimated $86 million unauthorised charges. As per the order of Thursday Amazon is required to set up a notice and claims process by early 2017, to alert parents of their eligibility for refunds, and then to reimburse them.

Coughenour said this approach “removes the uncertainty of the proper lump sum amount that the parties have vigorously disputed. Moreover, it accomplishes the goals of placing liability on Amazon and refunding eligible customers.” Coughenour called the FTC’s $26.5 million damages request “too high,” agreeing with Amazon that it might have taken into account failed password attempts unrelated to unauthorised purchases by children.

But the judge rejected Amazon’s request to issue refunds in the form of gift cards, saying the company would “undoubtedly recapture some of the profits that are at issue.” The FTC in 2014 settled similar cases against Apple Inc and Google Inc, now part of Alphabet Inc, with Apple agreeing to refund at least $32.5 million and Google at least $19 million.
All three companies have improved their password and other controls to help thwart unauthorised charges.

(With Reuters inputs)

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