Apple Agrees to FTC Terms Over In-App Purchases With $32 Million Settlement

Discussion in ' News Discussion' started by MacRumors, Jan 15, 2014.

  1. macrumors bot


    Apr 12, 2001

    Apple and the U.S. Federal Trade Commission have entered into a consent decree over in-app purchases on the App Store. In a memo to Apple employees, CEO Tim Cook wrote that the company felt it had no other choice.

    According to the agreement, Apple will be required to provide full refunds to parents whose children purchased unauthorized in-app items, setting a floor of $32 million on refunds.

    A large part of the FTC's concern was related to a fifteen-minute window after a password is entered on the App Store, during which other purchases can be made without a password being entered. Apple will now be required to notify users that the fifteen-minute window exists to obtain "expressed and informed consent" from its customers.

    In early 2013, Apple settled a class action lawsuit originally filed by parents after their children ran up hundreds of dollars on in-app purchases in freemium games.

    In the memo, which was obtained by Re/code, Cook wrote that it didn't "feel right for the FTC to sue over a case that had already been settled" and it "smacked of double jeopardy".
    In response, the FTC said that its proposed order is more robust than the settlement in the class action lawsuit, and that the resolution in that lawsuit didn't require Apple to change its behavior. Additionally, the FTC's settlement does not put a cap on the amount that could be refunded to parents, while the lawsuit's did.

    Article Link: Apple Agrees to FTC Terms Over In-App Purchases With $32 Million Settlement
  2. macrumors 68020


    Jun 11, 2007
    Parents should be more involved with their kids and know what they are giving them access to on devices.
  3. macrumors regular

    Jun 12, 2012
    Alligator Bayou
  4. macrumors 6502a

    Jan 16, 2011
    Can Apple do more to make sure kids don't make in-app purchases? Maybe!

    Can parents do more to see what their kids are doing at such a young age? Definitely!
  5. macrumors regular

    Sep 17, 2012
  6. macrumors G5


    Nov 14, 2011
    Much easier to sue a company with deep pockets.
  7. macrumors 65816

    Mar 20, 2008
    Why Apple?

    Why? This is the parents responsibility. How many more flags will Apple be forced to place before the experience of using the Apps becomes frustrating. What about the competitors in-app store? Where is the FTC for those companies? Hello???
  8. firedept, Jan 15, 2014
    Last edited: Jan 15, 2014

    macrumors demi-god


    Jul 8, 2011
    For me it was simple. Do not link a card to your ID. If I want to purchase something from iTunes or the App Store, then I purchase gift cards in the closest amount I require to make that purchase. Then there is no chance of funds being spent without my knowledge.

    Over seeing what your children are doing on their devices does not harm either. I am fortunate to have children who have always asked for gift cards so they can do their purchases as well. Again, no cards linked to their ID's. It has always worked for us thankfully.

    There is also the flip side, where a few parents just do not pay enough attention to their children. Hence these problems. Saying a few, not all.

    How much more can Apple do? Except completely remove the feature from apps. Which will not fly.
  9. macrumors 65816

    Jun 13, 2003
    Silly.. the FTC goes after the bright lights, someone will probably get a promotion for getting Apple to agree to this, just like the Justice Dept.
  10. macrumors 68030


    Sep 6, 2007
    So are they going after Google now too??? They should shouldn't they? I would think Android apps are guilty of the same thing.

    Something seems so wrong with this whole thing. Apple really seemed to do the right thing and is still being punished (again).
  11. macrumors P6

    Jun 22, 2009
    Another simple solution would be to add a second password for IAP. So it doesn't matter if they already are signed in - IAP would require a 2nd password or pin code.
  12. macrumors 6502a

    Aug 19, 2009
    Umm, what improvements and additional steps were implemented? AFAIK the 15-minute thing still exists and is ON by default (yes there is a setting for this that was added to iOS at one point, but the default is still WRONG) ....
  13. macrumors 6502a

    Sep 18, 2007
    New Mexico
  14. macrumors 68030


    Jul 17, 2002
    Corvallis, OR
    Freemium games that charge you $100 for something that will benefit you for a few minutes or hours are evil. Those are the things to get rid of. Personally, I despise the freemium model. It's designed to get customers to spend more on a game than they would have been willing to spend on an outright purchase. I'm not a big fan of the subscription model either (yes, I know, that's a whole other discussion), but I think that the freemium model is FAR worse.

    IAP, IMO, are not a bad thing. As an example of a good implementation of them, there is an app that I work with that has several modules that offer expanded functionality. By breaking up the functionality, they allow me the flexibility to only buy what I need. It works quite well. Also, IAP can be used in games to enable free trial and pay to enable the full game (as a 1 time purchase). I've seen a number of games follow this approach, rather than having separate free versions that are limited, and I think it works better and makes it more likely that a customer buys the full game.

    As for the whole parental question, my son succeeded in using an IAP in a game on my iPad. I was right there. He found a game that he wanted, so I downloaded it. We launched it, and there was something that he wanted (it was the option to fly a particular plane), so he clicked on it, a little dialog popped up, and he touched the OK button, all in a moment when I was answering a question my wife had asked me. BAM! A $10 purchase. Wrote to Apple and they refunded the purchase, but it drove home how quick and easy it was for my son, who occasionally plays on my iPad or my wife's iPad, to make a purchase if we've recently had a reason to enter the password.

    The steps we took to deal with this were straightforward. At first, I tried setting the option to always ask for a password. This became an issue primarily because this meant that the password was required for every update, in addition to new downloads and IAPs. So, that was switched back. The final solution was to turn off IAP, in the premise that, if my wife or I want to make an IAP, we know how to turn it back on so we can do it. This has worked quite well. There have been a couple of instances where my son has accidentally (or intentionally) hit a button that would have lead to an IAP, but it was quite promptly blocked.

    I appreciated the fact that Apple refunded that one mistaken purchase. But, having seen the potential issue, any future failures are on me. Knowing that my son is capable of doing this, it's up to me to make sure that there are reasonable safeguards against it. Eventually, those safeguards will include him having his own iPad with the setting to always ask for the password enabled.

    To pu it another way, fool me once, shame on you, fool me twice, shame on me.
  15. macrumors 65816

    Mar 20, 2008
    No. Just as the Gov has not gone after Amazon for Monopolizing the market and selling products at a loss to disrupt a market.
  16. macrumors demi-god


    Jul 8, 2011
    Good idea, but I could hear it now, "Why do I have to put in a second password or code to do in app purchases? I already put in my password once. What a pain!".
  17. macrumors 6502a

    Jul 6, 2010
    +1 they can never win.

    This entire thing is going to create an inconvenience for the rest of the population. I don't want another popup coming up when I purchase something or enter my password
  18. macrumors 65816


    Aug 3, 2007
    It seems much more sensible to always require password for IAP per default. The fact that a 15 minute window exists where anything goes is not something a reasonable consumer can be expected to know.
  19. macrumors 68030

    Oct 31, 2007
    London, UK
    So they did a settlement to refund money to customers which results in zero revenue for the FTC?

    Erm... okay.
  20. macrumors 6502a


    Mar 9, 2012
    Then have the ability to turn second verification off. And make the second verification on as a default until turned off by the user.
  21. macrumors 68000

    Dec 13, 2010
    Well then they would have to go after walmart too for selling iphones below cost.
  22. macrumors G3


    Aug 3, 2011
    Gramps, what the hell am I paying you for?
    It's one smaller inconvenience to answer a greater one. I'm pretty sure a parent with a spend-crazy kid would rather endure the occasional in-app password prompt than deal with an extra $600 worth of charges on their credit card.
  23. macrumors 6502

    Jan 13, 2014

    Somewhere I blame android for this IAP ****... The piracy on android gave birth to this model...
  24. macrumors P6

    Jun 22, 2009
  25. macrumors demi-god


    Jul 8, 2011
    We have a winner! Agreed.

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