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

[Tiger8]

I don't think that's what they're supposed to be but I do agree that in many cases, especially when it comes to addictive goods/services, that's basically what it amounts to.

But there are definitely cases where businesses don't try to sell you stuff you don't need (however subjective that determination can be) and those are places that I tend to get back to.

I'm not a sales man but I'm certified in SPIN selling. It is used heavily by Apple. What it involves is either exposing, overstating, or even creating a need, building up on the imagination of the user (how wonderful it would be if I...), and then finally sell the product and close the deal.

My point is though, in the grand sceme of things sales are about selling, regardless of the mean. It is not all evil by the way! Sometime people really need the product that's being sold to them, or at least, it will make their life better.

Again, I'm not a salesman, I don't have a horse in this race, but I just wanted to clarify.

There are unethical ways to make money and this is one of them - the amount of bad publicity Apple is getting and the fact that it's refunding many people, me included, suggests that this is is not a business model a reputable company should use. Also, I expect the money is a tiny part of its profits.

Let's put it this way; Apple constantly does cost benefit analysis of all its business operations - just like any other fiscally responsible company - if In App purchase cost (reputation, money, time) exceeds it's benefit, it gets axed.

It didn't get axed yet, so this means it is a beneficial program. Maybe it will get axed soon, but it seems at this point regardless of millions of dollars of settlements (and employee time used), it is still profitable.

 

[SlCKB0Y]

The whole idea is so wrong. Just because Apple saved a lot of money over the last 12 years doesn't mean that it should pay for the mistakes made by the kids (or the parents). It's just like ENFORCING your neighbors with strong savings habit to cover your burglary loss caused by you leaving your house doors open.

Except in this case it was Apple which left the door open.

 

[cocky jeremy]

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.

Watch your friggin kids. It isn't my problem if you let the little brat buy a bunch of apps because you don't pay attention, and it shouldn't be Apple's, either!

Except in this case it was Apple which left the door open.

They give you the ability to turn it off. It isn't Apple's fault. People have to whine and blame other people for their stupidity though.

 

[nickdylan]

How absurd. Settings:General:Restrictions:In-App Purchases. There you go, your kid can't spend $2,000 on Smurfberries. The US legal system is screwed up. I hate evil IAPs as much as anyone (gems, smurfberries, etc) but there are plenty of legitimate apps that make use of legitimate IAPs. The Sandbox, Garageband, and Paper all offer reasonable IAPs, as do thousands of other apps. This ruling sets a terrible precedent.

And aside from setting restrictions, parents should at least be informed enough to steer their kids away from evil Facebook-style games. The future of mobile gaming depends on it! These games only exist because people actually (intentionally) spend money on them. They're a twisted Skinner's Box, but outlawing them or forcing refunds or anything like that isn't going to fix the situation.

Let's put it this way; Apple constantly does cost benefit analysis of all its business operations - just like any other fiscally responsible company - if In App purchase cost (reputation, money, time) exceeds it's benefit, it gets axed.

It didn't get axed yet, so this means it is a beneficial program. Maybe it will get axed soon, but it seems at this point regardless of millions of dollars of settlements (and employee time used), it is still profitable.

I can't imagine IAPs being "axed" - keep in mind that $32 million might seem like a lot, but it's a drop in the bucket compared to App Store profits (a lot of which come from IAPs). On the iPhone right now, 48 of the top 50 top grossing apps are free with IAPs being the only source of revenue.

 

[tongxinshe]

But this isn't necessarily a problem where kids are misbehaving. There's nothing wrong with my 4 year old playing games on my iPad and there's nothing wrong with him not understanding IAP and that it costs money. If the system allows him to do it, he doesn't know he's doing it, and I don't know it's even a problem then that's what we're debating. People spouting off that others don't know how to manage their kids make it evident that they don't know what they're talking about.

Very similar to your analogy, I witnessed my friend's 3.8-year old son being deprived of using any smartphones/tablets/computers for a week, because he dismissed a phone call alert while playing game on my friend's iPhone, without informing my friend of the event in time. That's the "responsibility teaching" I am talking about.

 

[oldhifi]

"it takes a village"

 

[tongxinshe]

There's no harm in correcting a mistake. Apple isn't being "punished" - any more than someone who makes a purchase in a store and finds out that it doesn't fit well - or doesn't do the job it needs to, or wound up buying two similar items.

Well, the FTC IS NOW punishing Apple for this matter. That's the part (FTC involvement) that is showing a wrong attitude of the whole society!

All bad analogies as well. Point is - for the most part, Apple is responding responsibly on the refund side. The point of contention isn't that for most. The point is that the process should be changed.

I see no fault in requiring Apple and anyone else with an IAP model to not have options defaulted to create this situation.

You know, the majority people don't want this type of default you are suggesting, for the parents need this type of default, there is a different switch called "Parent Control" which changes a list of defaults to their default needs.

 

[samcraig]

Well, the FTC IS NOW punishing Apple for this matter. That's the part (FTC involvement) that is showing a wrong attitude of the whole society!



You know, the majority people don't want this type of default you are suggesting, for the parents need this type of default, there is a different switch called "Parent Control" which changes a list of defaults to their default needs.

Boo hoo - you're being inconvenienced. Guess what - there are options I don't want or need - but I have them. And there are others I want and they don't exist.

You want to blame parents for being "lazy" or bad parenting. But it's perfectly OK for non-Parents to complain about having to take an extra step?

A bit hypocritical if you ask me.

p.s. not everything that exists TODAY in iOS existed when this was brought to light.

 

[tongxinshe]

Except in this case it was Apple which left the door open.

No, in this case Apple sold you the house that automatically locks down after 15 minutes.

----------

Boo hoo - you're being inconvenienced. Guess what - there are options I don't want or need - but I have them. And there are others I want and they don't exist.

The system default is designed for the majority of the users, not for a specific minority subset.

 

[samcraig]

No, in this case Apple sold you the house that automatically locks down after 15 minutes.

----------



The system default is designed for the majority of the users, not for a specific minority subset.

Do you have statistical data to back that up?

 

[giantfan1224]

Very similar to your analogy, I witnessed my friend's 3.8-year old son being deprived of using any smartphones/tablets/computers for a week, because he dismissed a phone call alert while playing game on my friend's iPhone, without informing my friend of the event in time. That's the "responsibility teaching" I am talking about.

A 3.8 year old?

Let's not broadly call parents that have fallen into this trap (the 15 minute app store password window) as irresponsible parents. That's clearly not fair. I don't put this on the blame of the parents and not even on Apple. I appreciate when Apple recognizes these loopholes and closes them and does their best to rectify the situation. With that said, I'm not asking Apple as a consumer to babysit my kids. I certainly have a responsibility to watch what my kids are doing while using my i-device.

 

[SlCKB0Y]

Very similar to your analogy, I witnessed my friend's 3.8-year old son being deprived of using any smartphones/tablets/computers for a week, because he dismissed a phone call alert while playing game on my friend's iPhone, without informing my friend of the event in time. That's the "responsibility teaching" I am talking about.

Haha. It's always people without kids who know best about these things isnt it?

Were you also present for the next week when the child, now deprived of multiple sources of entertainment was that much more unsettled, unruly and harder to cope with? Were you there when your friend came home from a hard day at work, only to have his stress levels go through the roof with this bored kid constantly nagging him to use the iPhone? Were you there on day 3 when the child wore him down and he decided it was just easier to give the damn iPhone back to the child? No, of course not. Your friend had to deal with that, not you.

You don't just teach your kids things, they teach you things as well.

 

[Msail30bay]

The FTC can ... SUCK IT! as far I'm concern. Hate them and the FCC. What a bunch of ...........

 

[kdarling]

I have argued/begged for such "child mode" features for years on this forum, Apple's forum, and Feedback to Apple itself.
...
One classic example I have asked for is to be able to somehow remove the DELETE feature in the Camera/Photos area. Why? Because when my 4 year old wants to see the great photos we just took, I don't have to be paranoid that maybe, just maybe, he might accidentally (or purposely) hit the Delete icon and then red, candy-like button marked "Delete Photo".

This is where Android tablets shine. You can start a custom launcher that only allows kids access to the apps and actions that you choose.

The question I have is why Apple lets them on the App Store given the trouble they cause, especially the ones aimed at young children.

Money. 70% of Apple App Store sales are from in-app purchases.

There are unethical ways to make money and this is one of them - the amount of bad publicity Apple is getting and the fact that it's refunding many people, me included, suggests that this is is not a business model a reputable company should use.

My own daughter ran up $260 in charges on our iPad right after I had downloaded a game. She didn't know that this particular game used real money instead of the fake money that most kid's games use.

When I saw my email, I didn't realize it was her at first, and called Apple to see who had gotten my account information. Once I realized what had happened, I was resigned to paying the amount, and only asked Apple how to stop it from happening again.

To my surprise, they immediately refunded the money and apologized. I think they know that selling imaginary items to children is not exactly the most moral thing for a company to support.

If I had a child who had a tablet or phone there would NEVER be a card attached. Itunes/app store cards only. Feel so sorry for Apple this is a screw job.

If you only had one tablet or phone to share between, that's not possible.

--

This thread is a perfect example of why people without children should not be allowed to participate in a thread about children.

 

[Macmoney]

1)Apple HAS NOT PAID the parents yet...Tim's letter states "In all, we received 37,000 claims and we will be reimbursing each one as promised. " Mind you that these mailings/alerts to parents went out LAST YEAR...probably not 12/31/2013 but I bet much earlier....so why has Apple not paid yet? Hmmmmm.

maybe they were waiting on any pending litigation to conclude..no?

 

[Renzatic]

Watch your friggin kids. It isn't my problem if you let the little brat buy a bunch of apps because you don't pay attention, and it shouldn't be Apple's, either!

It's not always that easy. If you have kids, do you stand over their shoulders 24/7? Do you monitor their phone calls? Watch every TV show they watch? Listen in on every phonecall they make? Review every piece of literature they read? Play every game they want to play? Probably not. Even the most attentive helicopter parent can't pay attention to literally every single thing their child does throughout the course of the day for weeks, months, and years on end.

At some point, no matter how well you "train" them, will end up doing something dumb because they didn't think of the consequences of their actions. They're kids, it's what they do. You can't expect unerring perfection in the behavior of a 7 year old. No one's really to blame in a situation like that, but it's a situation that should be accounted for.

And no, it's not Apple's fault directly, since it's an unintended side effect of one of Apple's convenience features in iOS. Now that they're aware that sneak IAP purchases are a thing, should they do something about it? Yes. When it comes to money changing hands, a little more exacting security is far preferable to a little more convenience.

As for the parents of these kids, if it happens once, you're not to blame. It's unreasonable for people to expect you to know every single thing your child does, or every single feature of the software they use. If you didn't know about IAPs beforehand, get a refund, have a long talk with your child, then maybe ground them for the weekend.

...but if it happens again after that, you're dumb.

 

[SlCKB0Y]

This is where Android tablets shine. You can start a custom launcher that only allows kids access to the apps and actions that you choose.

Not only that but it supports multiple users so the child can have their own account.

 

[djgamble]

Is it not common sense to keep your password secret from your children?

Next we'll see banks paying people back for purchases their 'children' made.

I swear most of these purchases are probably just silly adults going on a virtual currency binge, seeing the bill and then complaining. I've never accidentally purchased anything and my kids couldn't because they don't have access to my password/credit card.

 

[diazj3]

I agree that parenting comes first, and there are no substitutions for it...

But I can also see this as fair, as there are definitely some game and kids' app developers that design their apps to exploit kids... and Apple, the control-freak that it is, bears responsibility. It's not as if Apple doesn't know what's going on, or that they don't know how much it benefits them - much around iOS and iDevices is designed towards kids in order to turn them into consumers. Why do you think Apple was so ready and kind on giving refunds to anyone that complained?

Plus believe me; the settlement is much less that what Apple gained from all this; it's not as if Apple lost money or learned anything. Hopefully they did, but I doubt it: it's all about getting the most money out of the users. I'm sure stuff like this is calculated. They know one can't make an omelet without breaking a few eggs.

So, a good and fair decision.

Cheers!

 

[kdarling]

Is it not common sense to keep your password secret from your children?

Is it not common sense to understand the issue before commenting?

The whole problem was that...

THE PASSWORD WAS _NOT_ NEEDED TO MAKE THE PURCHASES.

.
It's as if you had withdrawn money from an ATM, finished your business, left, and yet the ATM continued to give out money from your account for the next quarter hour to anyone who pushed the withdrawal button... no PIN needed.

 

[mantan]

This is where Android tablets shine. You can start a custom launcher that only allows kids access to the apps and actions that you choose.



Money. 70% of Apple App Store sales are from in-app purchases.



My own daughter ran up $260 in charges on our iPad right after I had downloaded a game. She didn't know that this particular game used real money instead of the fake money that most kid's games use.

When I saw my email, I didn't realize it was her at first, and called Apple to see who had gotten my account information. Once I realized what had happened, I was resigned to paying the amount, and only asked Apple how to stop it from happening again.

To my surprise, they immediately refunded the money and apologized. I think they know that selling imaginary items to children is not exactly the most moral thing for a company to support.



If you only had one tablet or phone to share between, that's not possible.

--

This thread is a perfect example of why people without children should not be allowed to participate in a thread about children.

This!!

 

[CFreymarc]

IAP are evil get rid of them

That is an over generalization. IAPs are very very helpful and restricting them IMO is a block to free trade. This was a ligit issues and Apple paid the fine and walked away wait 'til the administration changes to more pro-business / pro-success of a mindset.

 

[cocky jeremy]

It's not always that easy. If you have kids, do you stand over their shoulders 24/7? Do you monitor their phone calls? Watch every TV show they watch? Listen in on every phonecall they make? Review every piece of literature they read? Play every game they want to play? Probably not. Even the most attentive helicopter parent can't pay attention to literally every single thing their child does throughout the course of the day for weeks, months, and years on end.

At some point, no matter how well you "train" them, will end up doing something dumb because they didn't think of the consequences of their actions. They're kids, it's what they do. You can't expect unerring perfection in the behavior of a 7 year old. No one's really to blame in a situation like that, but it's a situation that should be accounted for.

And no, it's not Apple's fault directly, since it's an unintended side effect of one of Apple's convenience features in iOS. Now that they're aware that sneak IAP purchases are a thing, should they do something about it? Yes. When it comes to money changing hands, a little more exacting security is far preferable to a little more convenience.

As for the parents of these kids, if it happens once, you're not to blame. It's unreasonable for people to expect you to know every single thing your child does, or every single feature of the software they use. If you didn't know about IAPs beforehand, get a refund, have a long talk with your child, then maybe ground them for the weekend.

...but if it happens again after that, you're dumb.

That's what parental controls are for. That's why parents should check into stuff before buying kids stuff like this. At the end of the day, they're the one responsible for their kids, not Apple. It's ridiculous.

 

[dec.]

Is it not common sense to understand the issue before commenting?

The whole problem was that...

THE PASSWORD WAS _NOT_ NEEDED TO MAKE THE PURCHASES.

.
It's as if you had withdrawn money from an ATM, finished your business, left, and yet the ATM continued to give out money from your account for the next quarter hour to anyone who pushed the withdrawal button... no PIN needed.

Nice analogy, you "forgot" to mention the part where you take the ATM with you and hand it to someone else. But... nice try anyway.

 

[simonappheros]

It looks much more sensible to always require password for IAP per default.