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August 22, 2014

Unauthorized In-App Charges: Questions About Parents’ Role and the FTC’s Approach

The Federal Trade Commission has filed a lawsuit alleging that Amazon on numerous occasions billed customers for unauthorized “in-app” charges made by children, but several writers are raising questions about whether parents should take more responsibility in choosing what games their children have access to, and how the Federal Trade Commission should go about addressing such issues.

The Guardian’s Stuart Dredge writes that app store owners aren’t the only ones with responsibility:

Why are so many parents letting their children play mobile games that sell in-app purchases in quantities of up to $99.99 at a time? And, just as importantly, why are so many still unwilling to pay for the children’s apps that don’t do this?

Erik Kain, a Forbes contributor, writes that “while Amazon may be at fault for allowing this to continue, parents are still where the proverbial buck stops.”

“Just because a game comes from a beloved brand or is tagged as ‘educational’ doesn’t mean it’s good for your children,” he writes. “Do the research and play the games yourself before handing your children over to them.”

He also writes that parents need to “start demanding more from the game developers who target kids — and quite frankly, the FTC might want to expand its scope beyond just Amazon and other content portals and look at the ethics of micro-transactions in general, and especially how they are used in kids apps.”

Daniel Castro, a senior analyst  at the Information Technology and Innovation Foundation, in an editorial in The Hill, defends Amazon and looks at the issue from a policy angle. He argues that the lawsuit “reflects an unfortunate trend of the FTC creating policy through punitive consent decrees”:

By forcing companies into consent decrees, instead of using its own rulemaking authority or waiting for Congress to act, the FTC circumvents the democratic process, reduces transparency and limits public participation.

Instead, he writes that the FTC should set “clear rules” and act against companies that “knowingly violate them, or by going after companies that knowingly and willfully harm consumers, such as any app developers who try to exploit the in-app payment system in apps directed at children.”

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