Amazon is set to refund $70 million to parents whose kids made in-app purchases

Refunds coming soon.
Refunds coming soon.
Image: AP Photo/Ted S. Warren
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Dear parents, Amazon is ready to foot the bill for unauthorized purchases made by your kids.

The Federal Trade Commission (FTC) sued Amazon in July 2014, alleging that the Seattle-based e-commerce giant’s app store illegally allowed children to make purchases from within mobile apps (such as online games) without first seeking consent from their parents. By the time parents noticed the charges in their bank statements, it was too late—the company’s policy says all in-app charges are nonrefundable.

In April 2016, a federal district court ruled that the unwitting customers were eligible to seek damages from Amazon. While the FTC scored the big win, it lost a smaller battle: The judge denied its request for an injunction to permanently ban the e-retailer from charging parents or other account holders without getting permission from them first. Since then, the governmental agency and the online retailer have been embroiled in appeals.

Both parties have now agreed to end the litigation related to last year’s case, the FTC said in a statement April 4. Amazon is set to compensate disgruntled parents for more than $70 million-worth of in-app charges made between November 2011 and May 2016.

Amazon declined to comment. The FTC said that the details of how to claim the refund will be announced shortly.

“This case demonstrates what should be a bedrock principle for all companies—you must get customers’ consent before you charge them,” said Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection.

The FTC had leveled similar allegations of unlawfully billing payments for kids’ purchases against Apple and Google around the same time as it charged Amazon. The iPhone maker agreed to refund at least $32.5 million and the Mountain View behemoth had more than $19 million to pay back. Amazon may have fought back longer but three years later, it has met the same fate.