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FTC Files Suit Against Amazon For In-App Purchases 47

Posted by samzenpus
from the a-fool-his-kids-and-his-money dept.
Charliemopps writes The Federal Trade Commission has filed suit against Amazon for illegally billing parents for in-app purchases of digital goods prior to requiring a password for making purchases. "The FTC's complaint, filed Thursday, asks the court to force Amazon to refund the money to those customers. In-app purchases typically involve virtual goods bought within an app, like extra coins or energy in a game, according to the FTC. Some bills totaled hundreds of dollars, and some virtual goods cost as much as $99.99." We recently told you about Amazon's refusal to reach a settlement over these FTC complaints.
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FTC Files Suit Against Amazon For In-App Purchases

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  • I still remember when I interviewed with the team in Irvine, CA. No attention to use experience... Amazon is a personification of the movie, Mimic.
    • by Anonymous Coward

      I really know nothing about how Amazon works internally, so perhaps you can enlighten me.

      If it is as dysfunctional as you say it is, how do they manage to do such great things with software? How do they manage to create their website? How do they manage to operate such a huge warehousing and logistics operation? How do they manage to create AWS, which itself hosts so many other significant web properties?

      • Re:about time (Score:4, Interesting)

        by Anubis IV (1279820) on Thursday July 10, 2014 @11:19PM (#47429107)

        He only claimed that they paid no attention to user experience, not that they're shoddy at engineering things. The examples you provided actually demonstrate that point.

        For instance, I read a few years back about how Bezos had then-recently hired designers to redo the website since its design seems like an over-crowded holdover from the '90s, before disregarding their ideas entirely because he couldn't bear to be without all of the stuff that's currently packed in. Likewise, their software for the Kindle Fire line can do some really neat stuff, but everything I've heard and seen indicates that it's sub-par from an experience perspective (e.g. unresponsive/laggy UI, inconsistent app designs/flows, disregard for common and obvious use cases). As for AWS and logistics, what of them? Logistics is entirely internal, while AWS isn't aimed at end users at all.

        They can and do make cool stuff that's well-engineered, but there's a big difference between good engineering and good design. I, and I believe the OP, are accusing them of lacking the latter when it comes to their consumer-facing endeavors. Pretty much everything about Amazon feels like a cheap commodity, which is fine when I want cheap cables from their Amazon Basics line that I'll plug in once and never touch again, but isn't so good when it's something I'm interacting with on a daily basis, such as their site.

        • by tlhIngan (30335)

          All that needs to be said is to compare woot.com after it's been taken over by Amazon with the new site the Woot founder started up - meh.com (yes, it's called meh).

          Hell, if you remember woot's website before the takeover, it bears a closer resemblance to meh than today.

          As for Amazon's awful ToS? Amazon is Apple-lite. They have an approval system just like Apple, and that's where Amazon's value-add is.

          Remember how we keep asking for someone to do a curated app store to help get rid of the iffier apps found

        • I read a few years back about how Bezos had then-recently hired designers to redo the website since its design seems like an over-crowded holdover from the '90s, before disregarding their ideas entirely...

          In all likelihood we should thank our lucky stars he did. There are Designers and then there are "designers". "Designers" unfortunately seem to value aesthetics well above all else, including usability. They are art school grads without any particular skill with engineering or and they appear to have slept through usability training. The interfaces I'm seeing lately tend to hide functionality that should not be hidden even when that makes it less pretty. I don't care if an interface is ugly if it maxim

      • Different divisions. The AWS geniuses are not the same department as the marketing morons who thought it would be a great idea to make free-to-play kiddie games with $10 bonus characters.

        The real dummies in this are of course the parents who handed out devices that had the credit card information stored on record, or even worse, gave their kids the credit cards when prompted. When I tried that shit back in the late '90s I got my computer privileges revoked for a month.
      • Re: (Score:1, Informative)

        by Anonymous Coward

        I really know nothing about how Amazon works internally, so perhaps you can enlighten me.

        how do they manage to do such great things with software?

        By ripping off Android for their mobile platform and then screwing developers [shiftyjelly.com] who sign their awful agreement [readwrite.com]?

        How do they manage to operate such a huge warehousing and logistics operation?

        By allegedly exploiting [huffingtonpost.com] and shorting [reuters.com] their employees and having soulless [fastcodesign.com] fulfillment centers/neo-sweatshops [salon.com]?

      • by d'baba (1134261)

        If it is as dysfunctional as you say it is, how do they manage to do such great things with software?

        In the Amazon.com warehouse that I worked in the tools we all worked with were written in Perl.

    • It's also time they address the infamous one-click buying button, which is basically the same thing.

      • Since the only time this happened to me I got a script answer about how they would fix it just this once, I've wondered could I do a credit card challenge if Amazon refused to refund. Essentially, to me the consumer, Amazon is charging my card without authorization. Since Amazon refuses to resolve the situation after the first occurance, isn't that grounds for me to pursue it with my card company or did I sign that right away in a EULA somewhere?
  • Didn't Apple go through this exact same issue with the iPhone app store a few years ago, and they fixed it?

    • by rmdingler (1955220) on Thursday July 10, 2014 @10:32PM (#47428969)
      Indeed. They were persuaded to refund 32.5 million or so US Dollars by the ftc...arguably a small percentage of the take from the operation.

      They knew what they were doing, and they also know only a given percentage of those affected will ever seek damages.

      If X is less than the cost of a recall, we don't do one.

    • by Bob_Who (926234)

      Didn't Apple go through this exact same issue with the iPhone app store a few years ago, and they fixed it?

      Yes, your absolutely right.

      A pattern is beginning to emerge where the enforcement of laws has transformed into the institutionalized funding of government with punitive measures that neither protect the consumer nor discourage future violation of ethics and common decency. Is this regulatory befuddlement really working for Americans if the evil corporate behavior is not deterred? I am glad some folks are paying attention and remember the relevant recent events so that we may become angry villagers and

  • Where is section 5? (Score:5, Informative)

    by sumdumass (711423) on Thursday July 10, 2014 @10:31PM (#47428963) Journal

    Here is the complaint in PDF
    http://www.ftc.gov/system/file... [ftc.gov]

    It says section 5(a) but I'm having trouble locating section 5.
    http://www.law.cornell.edu/usc... [cornell.edu]

    Anyone got any ideas where I'm doing it wrong?

    • by Bob_Who (926234) <Bob@ w h o.net> on Thursday July 10, 2014 @11:47PM (#47429153) Homepage Journal

      Anyone got any ideas where I'm doing it wrong?

      You actually attempted to read it.

    • by itsdapead (734413) on Friday July 11, 2014 @05:25AM (#47429885)

      Anyone got any ideas where I'm doing it wrong?

      You need to 30 gems to get the Magic Scroll of Tort and unlock section 5. Best way is to purchase the "LawyerUp Gold" pack for $14.99.

      Thank you for playing Crazy Courtroom Saga 3.

    • by Anonymous Coward

      You found it. You can also get it from the Law Revision Counsel at the following: http://uscode.house.gov/

      Here is a link to section 5 of the Federal Trade Commission Act:

      http://uscode.house.gov/view.xhtml?req=%28title:15%20section:45%20edition:prelim%29%20OR%20%28granuleid:USC-prelim-title15-section45%29&f=treesort&edition=prelim&num=0&jumpTo=true

      The reason it says section 45 rather than section 5 is because section 5 of the Federal Trade Commission Act is not in a positive law title of the

      • by sumdumass (711423)

        So section 5 was basically the bills as passed and title 15 section 45 is the act in the US code. Do I have that right?

        In that case, they are claiming the entire section 45 as the basis of the illegality which makes some sense. After reading it, I saw several places in which it should apply.

        Thanks for the explanation. For a minute there, I thought Amazon would be able to get off on a technicality and the FTC was incompetent or something. Turns out it was just me.

  • This seems to have implications in that whole free-to-play space. I wonder if anyone is worried about that angle?

    • by Himmy32 (650060)
      No one has problems with the micro-transactions themselves. But for them to be made without having to type the account password. So when you die in an app a dialog might pop up saying click ok to get another life and the parents account gets magically charged $10. No one really cares if the person charges that much for a life, but that there is a proper warning and approval. Free to play will be just fine, unethical apps that try to scam small children hopefully won't.
      • by BobMcD (601576)

        I can see every app requiring a password and approval for all purchases.

        That alone will hurt the model.

  • Gasp.... kids are pressing buttons in a game. Hey Mom and Dad... supervise your kids and what they do. Problem solved. I never cease to be amazed how found money (refunded money) can bring out the worst in people.... people are willing to look like irresponsible victims for a few bucks. Dignity and selfrespect are out the window if the price is right.
    • by Himmy32 (650060)
      No one is going to argue that parents shouldn't be watching what their children do. However if the system is set up that you can spend $100 in 2 clicks in Playskool-like game without entering the account password, something is wrong. The whole point of the suit is that apps could buy from the app store from inside the application without entering the password or having any sort of Parental Control. Amazon knew that this was a problem and profited off of it. And you are calling the parents greedy...
    • by rochrist (844809)
      Yeah, no. Part of the reason for this complain is because apps were specifically being misleading about when actual money (as opposed to some sort of in-game currency) was being spent. Pretty damn close to fraud.

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