Early this afternoon, Apple and the U.S. Federal Trade Commission entered into a consent decree over in-app purchases on the App Store. Here are the details from the CBC:
Apple will refund $32.5 million to consumers to settle a federal case involving purchases that kids made without their parents’ permission while playing on mobile apps, the U.S. government announced Wednesday.
The Federal Trade Commission said Apple will make full refunds for any such in-app purchases made by kids while playing on mobile phones and other devices, and incurring charges without parents’ knowledge or permission.
The commission said it had received tens of thousands of complaints about unauthorized charges.
Apple however, wasn’t thrilled about doing this. Here’s a piece of what was in a leaked memo from Apple CEO Tim Cook:
Last year, we set out to refund any in-app purchase which may have been made without a parent’s permission. We wanted to reach every customer who might have been affected, so we sent emails to 28 million App Store customers — anyone who had made an in-app purchase in a game designed for kids. When some emails bounced, we mailed the parents postcards. In all, we received 37,000 claims and we will be reimbursing each one as promised.
A federal judge agreed with our actions as a full settlement and we felt we had made things right for everyone. Then, the FTC got involved and we faced the prospect of a second lawsuit over the very same issue.
It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.
At the end of the day, it might be irrelevant. Back to the CBC article for more on that:
Last November, the website Happier.co.uk used the latest quarterly earnings information to calculate how much the world’s top-earning tech companies made in revenue every second. The website found that Apple made about $4,540 in revenues per second, meaning it would take just under two hours for Apple to earn back the $32.5 million it has agreed to pay out in the apps settlement.
So this settlement is basically a rounding error for Apple. Well, at least it’s over for them.
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This entry was posted on January 15, 2014 at 7:15 pm and is filed under Commentary with tags Apple, Lawsuit. You can follow any responses to this entry through the RSS 2.0 feed.
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Apple Plays Nice With FTC Over In App Purchases
Early this afternoon, Apple and the U.S. Federal Trade Commission entered into a consent decree over in-app purchases on the App Store. Here are the details from the CBC:
Apple will refund $32.5 million to consumers to settle a federal case involving purchases that kids made without their parents’ permission while playing on mobile apps, the U.S. government announced Wednesday.
The Federal Trade Commission said Apple will make full refunds for any such in-app purchases made by kids while playing on mobile phones and other devices, and incurring charges without parents’ knowledge or permission.
The commission said it had received tens of thousands of complaints about unauthorized charges.
Apple however, wasn’t thrilled about doing this. Here’s a piece of what was in a leaked memo from Apple CEO Tim Cook:
Last year, we set out to refund any in-app purchase which may have been made without a parent’s permission. We wanted to reach every customer who might have been affected, so we sent emails to 28 million App Store customers — anyone who had made an in-app purchase in a game designed for kids. When some emails bounced, we mailed the parents postcards. In all, we received 37,000 claims and we will be reimbursing each one as promised.
A federal judge agreed with our actions as a full settlement and we felt we had made things right for everyone. Then, the FTC got involved and we faced the prospect of a second lawsuit over the very same issue.
It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.
At the end of the day, it might be irrelevant. Back to the CBC article for more on that:
Last November, the website Happier.co.uk used the latest quarterly earnings information to calculate how much the world’s top-earning tech companies made in revenue every second. The website found that Apple made about $4,540 in revenues per second, meaning it would take just under two hours for Apple to earn back the $32.5 million it has agreed to pay out in the apps settlement.
So this settlement is basically a rounding error for Apple. Well, at least it’s over for them.
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This entry was posted on January 15, 2014 at 7:15 pm and is filed under Commentary with tags Apple, Lawsuit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.