Apple Signs Consent Decree with FTC over In-App Purchases

| News

Apple and the U.S. federal Trade Commission announced Wednesday that the company has agreed to to a consent decree with the FTC covering the way Apple handles in-app purchases. The agreement includes a commitment to return at least US$32.5 million to customers confused by the company's in-app purchases.

Or perhaps it would be more accurate to say customer confused by the way Apple used to do in-app purchases, because this issue was settled more than two years ago in a private class-action lawsuit. In a letter to employees published by Re/code, CEO Tim Cook politely complained about just that, saying:

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.

In short, Mr. Cook said that getting sued by the FTC over this issue would have been unfair, but that settling with terms the company had already set for itself was better than getting into another legal fight. The letter also makes it clear that Mr. Cook understands that Apple has grown to be such a large company, that it will continue to be under close scrutiny from regulators.

"We don’t shy away from these kinds of questions," he wrote, "because we are confident in the integrity of our company and our coworkers."

In addition to agreeing to return the above-mentioned money to consumers, Apple also agreed to make certain business records available to the FTC for up to five years. These include copies of any complaints received by Apple, refund requests and refunds paid, and proof of compliance with the decree itself.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

Comments

daemon

I think you meant decree not degree…

Bryan Chaffin

Thanks for catching that, daemon!

Log-in to comment