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Critics To FTC: Why Do You Hate In-App Purchasing Freedom? 171

jfruh writes The FTC has moved aggressively recently against companies that make it too easy for people — especially kids — to rack up huge charges on purchases within apps. But at a dicussion panel sponsored by free-market think tank TechFreedom, critics pushed back. Joshua Wright, an FTC commissioner who dissented in a recent settlement with Apple, says a 15-minute open purchase window produced "obvious and intuitive consumer benefits" and that the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many users as possible."
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Critics To FTC: Why Do You Hate In-App Purchasing Freedom?

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  • Their Job (Score:5, Informative)

    by BitZtream ( 692029 ) on Saturday August 02, 2014 @07:32AM (#47588215)

    Because its their job to hate people who take advantage of others in matters of trade?

    • Re:Their Job (Score:5, Informative)

      by jd ( 1658 ) <imipakNO@SPAMyahoo.com> on Saturday August 02, 2014 @08:01AM (#47588317) Homepage Journal

      Very true. A wholly free market is actually quite toxic, as a certain Adam Smith noted. Especially when it's dishonest.

      In-app purchases are the return of micropayments, but for virtual goods less valuable than Second Life real estate. It is, of course, entirely fair for companies to sell such products and for customers to buy them, but the control system is poor, virtual goods have an amazingly high failure rate for delivery, and prices are often in the small print.

      • Re:Their Job (Score:5, Insightful)

        by Bob9113 ( 14996 ) on Saturday August 02, 2014 @09:13AM (#47588583) Homepage

        >> Because its their job to hate people who take advantage of others in matters of trade?

        > Very true. A wholly free market is actually quite toxic, as a certain Adam Smith noted. Especially when it's dishonest.

        Yes. Yes, yes, yes! Exactly this.

        the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many users as possible."

        Because that is what we pay them to do. And there is a very good reason; because private firms measure customer satisfaction through the lens of maximization of profit (fairly short run profit in the case of apps), and the FTC measures it through imperfect objective analysis of the rational self-interest and informedness of the transaction participants. Gee, here's a surprise: Those two measures don't always agree, and sometimes, when they are far enough out of whack, it actually increases GDP in the long run if you limit the freedom of people to engage in inefficienty transactions.

        A really good example of such potentially inefficient transactions is children, who do not understand how much time and effort it costs to acquire money, are in the throes of video game passion and a screen pops up saying, "Win More, Only $3.99! Buy Now!"

        Joshua Wright, an FTC commissioner who dissented...

        A market filled with efficient transactions increases GDP in the long run relative to a market with less efficient transactions. So, tell me, Joshua Wright; do you hate the economy? Do you want a lower GDP? Do you want our corporations to lose money? Do want our wealthiest stockholders to have to buy slightly smaller Gulfstreams? Answer me, Mr. Wright: Do you hate America?

        • by msauve ( 701917 )

          A really good example of such potentially inefficient transactions is children, who do not understand how much time and effort it costs to acquire money, are in the throes of video game passion and a screen pops up saying, "Win More, Only $3.99! Buy Now!"

          If they can do that, those children have much larger issues than a $4 charge - they have stupid and irresponsible parents, who are not only providing inadequate supervision, but are incompetent at teaching their children life skills.

          Those in-app purchases

          • by Bob9113 ( 14996 )

            If they can do that, those children have much larger issues than a $4 charge - they have stupid and irresponsible parents, who are not only providing inadequate supervision, but are incompetent at teaching their children life skills.

            Your observation, whether true or not, does not make the transactions efficient. Inefficient transactions are bad for the economy, regardless of their cause. Do you want American companies to lose money? Do you hate America?

          • by Bob9113 ( 14996 )

            I really liked my last snarky response, but I just thought of another one:

            Those in-app purchases require an account password - that's a parental responsibility. Allowing the kids to know the password is no different than sending them to the toy store with a blank check. Not only are the parents not teaching their children to take responsibility for their actions, the parents themselves aren't being responsible.

            I've long been thinking the same thing about crosswalk signals. Children whose parents fail to tea

            • If we don't allow natural car-versus-pedestrian fatalities to punish stupid parents by killing their children, how will they ever learn?

              The problem is that the child will dent the car that hit him, causing the driver problems. Even if the driver manage to prove that the child ran out unexpectedly (lets say they have a dashcam video that shows this), there is still going to be a trial costing the driver money and the money needed to straighten out the car. Not to mention the stress and psychological issues for the driver.

          • by sjames ( 1099 )

            Perhaps you haven't educated yourself sufficiently on the issue at hand. The problem was that parents would enter their password to allow a single purchase and then hand the device to a child, unaware that the password would be cached for the next X minutes. They expected that the child not knowing the password would secure them from unauthorized in-app purchases. That is a reasonable expectation, one would think.

            Alas, businesses wanted to make impulse buys as easy as possible and so violated that reasonab

            • Re: (Score:1, Troll)

              by msauve ( 701917 )
              The 15 minute behavior [archive.org] has been documented for over 3 years. Additionally, every purchase requires confirmation. As I said, this is a parental failure. If you can't raise kids who can be trusted with a blank check, simply don't give them one. If you don't understand how the purchasing system works, don't use it, and certainly don't authorize your kid to do so.
              • The 15 minute behavior has been documented for over 3 years.

                Which doesn't mean that you can expect any non-geek to know it. Heck I'm a geek, and I've owned iOS devices since 2008 and if I ever knew about a 15 minute window I've forgotten.

                And the attitude that if a kid does something against it's parents wishes, it's a bad parent is just risible. ALL kids find the opportunities available to them to skirt the rules. Even when they're old enough to know what the rules are. And they can be pretty cunning.

                Your judgements show a remarkable lack of knowledge of the real wo

              • by sjames ( 1099 )

                A LOT of people knew nothing about it and the interface didn't tell. Nor did it offer a confirmation of when the 15 minutes had expired. Ideally, it should have expired instantly unless the user specifically selected a window, and should have offered a way to see if the window was still open and a button to close it immediately.

                There is a such thing as an interface that defies understanding. This was such an interface and it seems deliberate.

                It was clear this was a source of trouble and confusion well befor

        • More succinctly, an effective free market requires participants to be rational and informed. Product behaviors like keeping a purchase window up for 15 minutes without notifying the customer deliberately try to mislead and misinform the public. That's the sort of thing the FTC is there to crack down on.

          I don't see any problem with a pop-up after a purchase asking if you wish to continue to make purchases for 15 min without having to re-authorize. But to silently make it the default behavior is pretty
      • by AmiMoJo ( 196126 ) *

        In-app purchases are the return of micropayments

        The biggest problem with micropayments is that they are not micro. If we were talking 1 or 2 cents to buy an in-game upgrade then children could spend their pocket money on them. Instead we are talking about several Euros/Dollars just to get another turn today.

  • Joshua Wright, an FTC commissioner who dissented in a recent settlement with Apple, says a 15-minute open purchase window produced "obvious and intuitive consumer benefits" and that the FTC "simply substituted its own judgment for a private firm's decision as to how to design a product to satisfy as many shareholdersas possible."

    FTFY

  • If a 15 minute open refund period produced "obvious and intuitive consumer benefits" just think about what an hour could do. You know, like enough to actually test out the app for REAL. Especially apps that are more complicated than flappy bird and, oh yeah, more expensive.

    Mea Culpa: though I will acknowledge that a "free" app with in-app purchase, that works well enough to test it out before spending money, is indeed one way to get around the limited 15 minutes to test the app.

    But of course those apps ar

    • by aitikin ( 909209 )

      If a 15 minute open refund period produced "obvious and intuitive consumer benefits" just think about what an hour could do.

      Uhyou misread that. "15-minute open purchase window produced 'obvious and intuitive consumer benefits'" I doubt the FTC would be opposed to an open refund period...

    • by teg ( 97890 )

      If a 15 minute open refund period produced "obvious and intuitive consumer benefits" just think about what an hour could do. You know, like enough to actually test out the app for REAL. Especially apps that are more complicated than flappy bird and, oh yeah, more expensive.

      Mea Culpa: though I will acknowledge that a "free" app with in-app purchase, that works well enough to test it out before spending money, is indeed one way to get around the limited 15 minutes to test the app.

      But of course those apps are not the problem. The problem the government (you know, the supposedly by the people FOR the people) is trying to prevent predatory sharks from bilking people of money through shady practices like kids games that make it very easy to just click click spend a shed load of money.

      "Open purchase window" here does not mean "open refund". It means "you don't have to enter your password again to buy something". Go smurfberries! [escapistmagazine.com]

      • Re: (Score:2, Insightful)

        A 15 minute refund period would be delicious. It would completely destroy the IAP marketplace. I'd be able to again buy high quality games for $5-15 and not be faced with game designers who focus on nickel-and-dime ripping me off. They'd actually have to work on making the game fun enough for me to be willing to pay for the non-trial version. Wolfenstein 3D and later Doom did this well with shareware trial versions. Similarly a whole bunch of games from that era: Jill of the Jungle, Commander Keen, etc

        • "Disable In App Purchases" should be a checkbox in the settings for the App Market and it should simply render invisible any games that incorporate In App Purchases

          It would also render invisible any games that use your suggested shareware model. There are two distinct kings of IAP: "entitlements", which are purchased once and stay with the user as long as the use continues to use the platform, and "consumables", whose purchase can be repeated. Purchases of paid apps are essentially an entitlement inside the App Store app, and registering shareware is the same as buying mission packs, which are entitlements. Most of the IAP ire comes from consumables like "smurfberries

          • Nope. It would enable games with a 'trail' shareware version, and a 'paid' full version. There are many games that are distributed this way in the App Store. In particular, one of the market leaders, Minecraft Pocket Edition, is distributed this way.

            The 'entitlements' model for 'upgrading' are just an alternative path. With a 'block IAP' checkbox, it would cease to exist.

            • It would enable games with a 'trail' shareware version, and a 'paid' full version.

              If the trial version and the full version are separate apps, then how would the player move saved progress from the trial version to the full version? Or would the player be forced to restart the campaign?

          • by sjames ( 1099 )

            They could always offer the non-shareware version separately in the App Store. That would be better anyway since it would assert control over the purchase and avoid deceptive in-app interfaces.

  • ... labeling all games with IAPs as rentals and displaying the average cost of being able to keep playing... per hour or something like that?

    • by sqlrob ( 173498 )

      I don't know that an average cost would actually show that much. With the articles about "whales", it seems that the average would be fairly low.

    • What would it display for "price per hour" in the case of games that ship with one episode and use a one-time in-app purchase to "register" the game and unlock the entire rest of the campaign? Historical examples include Doom, which had "Knee-Deep in the Dead" without charge and two mission packs called "Ultimate Doom" and "Doom II".
    • ... labeling all games with IAPs as rentals and displaying the average cost of being able to keep playing... per hour or something like that?

      But most are not rentals. For example, "Candy Crush" with levels 1 to 35 is free. Candy Crush with levels 1 to 50 costs £0.69. Candy Crush with levels 1 to 64 costs £1.38. And so on. There's no rental. Once you paid it's yours. For £1.38 you get a game with 65 levels, which you can download on all your devices and play as long as you like.

      • Candy Crush is a massive pig of a game, though. One that is close to collapsing under the weight of the bullshit they've shoved in there. The spash screens, side-game spam and extra garbage that rumbles into your face while you're trying to... well... get to the screens to crush candy, are really annoying. Thank goodness it's such a well-cloned game, because there are many lightweight competitors where you can actually play the game. King, the publishers of Candy Crush Saga, are a Zynga wannabe. Let's

    • A lot of the games that have IAP are 'pay to win' games. One of the most popular games in the market from one of the successful developers is Hay Day by Supercell. It's essentially a 'play to win' game. My spouse plays it and has a lot of fun doing so but has never, ever, made an In App Purchase to do so. The leaderboards are completely meaningless and irrelevant to people who've never paid for 'gems' though, because the 'Top Players' are entitled rich children (one presumes) who've bought their way to

  • The arcade (Score:4, Insightful)

    by Bender Unit 22 ( 216955 ) on Saturday August 02, 2014 @07:48AM (#47588263) Journal

    As the arcades closed I thought that never again people would accept coin-op's.
    But the Smurfberries in all their incarnations and the DLC's on PC clearly shows I was wrong. :)

    • and often weren't bad value for the money. You got to play games on far more advanced hardware than you could afford at the time and the operators maintained a public space you could play others in.

      DLC's & free to play are the same. You can do them right and wrong. I've generally heard good things about Warframe and League of Legends. On the other end of the spectrum you've got Dungeon Keeper and Candy Crush Saga. And right in the middle you've got stuff like Mechwarrior tactics.

      Heck, if you wa
      • by sjames ( 1099 )

        DLC's & free to play are the same.

        How so? They don't upgrade your phone/tablet hardware in any way and they don't provide a place to hang out with friends.

    • by Polo ( 30659 ) *

      I actually think coin-ops were a little more honest. You usually got to play with really cool hardware,
      and you physically insert your money one by one.

      In some cases the IAP model is like an arcade machine where you don't hand your money over, instead it reaches into your wallet for you and takes out an ambiguous amount.

  • by StripedCow ( 776465 ) on Saturday August 02, 2014 @07:48AM (#47588265)

    You go to a theme-park with your children.
    If the kids want to have an ice-cream, they just go to the ice-cream stand, order and say the name of their parents (you), so they get the bill when you leave.

    Who thinks this is not a brilliant idea?

    (Sorry for not posting a car-analogy)

    • You go to a theme-park with your children. If the kids want to have an ice-cream, they just go to the ice-cream stand, order and say the name of their parents (you), so they get the bill when you leave.

      Who thinks this is not a brilliant idea?

      Meanwhile the park employees are all atwitter about StripedCow's 300 children.

      • Meanwhile the park employees are all atwitter about StripedCow's 300 children.

        But once management finds out about their tweets, watch them end up fired for spilling the beans, like Nicole Crowther in this BI article [businessinsider.com], in favor of people who can keep their mouth shut. Then watch management find people like twitter [slashdot.org], who can do the job of a dozen people [slashdot.org].

        • Meanwhile the park employees are all atwitter about StripedCow's 300 children.

          But once management finds out about their tweets, watch them end up fired for spilling the beans, like Nicole Crowther in this BI article [businessinsider.com], in favor of people who can keep their mouth shut. Then watch management find people like twitter [slashdot.org], who can do the job of a dozen people [slashdot.org].

          Consider that "atwitter" does not necessarily mean "tweeting", or whatever social that people use to destroy their lives.

          My point was that StripedCow seems to think that kids telling an ice cream vendor that they are his kids, so they can buy their munchies at the park was a good idea. Then suddenly everyone becomes StripedCow's children. It's like in-app purchases gone wild.

          • I'm certain the park would issue bar-coded or electronic armbands to each child, so that the consumption could be tagged to a specific parent.

            • I'm certain the park would issue bar-coded or electronic armbands to each child, so that the consumption could be tagged to a specific parent.

              And hopefully medical restrictions, like Suzy who is diabetic, who really has a craving for ice-cream, of maybe some kids with religious food bans, or Bruce with the peanut allergy who wants to commit suicide by park vendor.

              There are just so many things wrong with the idea. Perhaps the parent might make a sensible judgement and be around their children.

    • by fermion ( 181285 )
      I thought of it another way. You go to the store and everything the kids touches goes on your credit card. Remember, most of what occurs in the apps has no real world equivalent. You can't go and return it, or even complain it was faulty or did not meet expectation. At least a theme park if there is bug in the ice cream you might get another one.

      In any case,Apple is absolutely wrong here. If this were a convenience feature it would be easy to add in a setting like they do with so many other features.

    • And if they have the ability to order ice cream for every child in the park on your name? Or to order a 10 year supply shipped daily to your house on your name?

  • by DrXym ( 126579 ) on Saturday August 02, 2014 @07:51AM (#47588281)
    Impose a maximum in-game purchase to the game's rating and impose a maximum spend per account per month. i.e. an E for everyone game may have a max spend of $5. If a user wants to override these settings then they can from the account settings. The power of the default mean the majority won't and thus people will be protected from nasty surprises. Oh and ban more than 1 in game currency that maps onto real world money and require them to show a dollar / euro / pound value against any purchase that uses it.

    Aside from protecting users it deters games from being glorified skinner boxes with cow-clicker complexity and micropayments galore and encourages producers to start making actual games again.

    • Re: (Score:1, Flamebait)

      by rmdingler ( 1955220 )
      Impose. Ban. Regulate.

      Is this where we set the bar of government interference in our private lives?

      A very simple solution would be the parents don't allow an irresponsible child to play a game with in-game purchasing. Hell, that might even institute a bit of self-restraint a growing child could use the rest of his life.

      • by Mr. Slippery ( 47854 ) <tms&infamous,net> on Saturday August 02, 2014 @08:40AM (#47588471) Homepage

        Is this where we set the bar of government interference in our private lives?

        Commerce is not your "private life". It is the transfer of "property", something created by government fiat and enforced by government guns. And it in most cases is it the transfer of "property" to or from a corporation, an entity created by government fiat.

        If it doesn't directly involve government issued land and resource deeds (the root of all physical property), copyright and patents and trademarks (the root of all so-called "intellectual property"), or corporate charters, and doesn't involve government-enforced contracts, then you can maybe complain about government interference in your "private life".

      • by Jartan ( 219704 )

        Your idea falls apart when ALL the games have in-game purchasing.

      • How many of those games have obvious in app purchasing before you get the bill?
      • by DrXym ( 126579 )
        Thanks Ayn for completely understanding the problem.
      • For any problem, there's a solution that is simple, and wrong.

        It's reasonable to download a kid's game, and to hand the phone to a kid to keep him or her amused. In doing this, one would normally assume that that was the extent of the transaction, and that the kid wouldn't be able to spend one's money while playing the game. Apple certainly didn't warn people of this, and apps weren't warning parents of in-app purchases. Instead, they did their best to get the kid to spend large amounts of money witho

    • by cob666 ( 656740 )
      Apple already has most of these restrictions and more.
      The ability to turn off in app purchasing and / or making purchases. The also have 'allowances' which once reached the user can't spend pass that unless they provide an additional form of payment. iDevices also allow you to turn OFF the 15 minute window and specify that a password is required for every purchase.

      Parents really have NO right to complain if their children are racking up purchases on their iDevice because they have the ability to limit th
      • by DrXym ( 126579 )
        I'm sorry but parents DO have a right to complain. Apple / Google / Microsoft are facilitators of a system which not only encourages but profits from games charging money for in-app purchases. It means that the controls are begrudging implemented and usually flipped to off position by default. And it is not hard to find games aimed at young kids where the game encourages the player to purchase $50-100 bundles of coins, skins or whatever. They don't want to tip the applecart so to speak.

        And yeah parental r

  • Untrue statements (Score:5, Insightful)

    by Anonymous Coward on Saturday August 02, 2014 @07:51AM (#47588283)

    When companies take advantage of customer addiction tendencies, it's predatory, and causes long-term suffering, for short-term satisfaction.
    Since the companies can't regulate themselves, the government must do it for them.

    Coke is without coke these days as well, and that is a good thing (coke causes the brain to become psychopathic over time).

  • by Bing Tsher E ( 943915 ) on Saturday August 02, 2014 @08:27AM (#47588413) Journal

    Why is this phrased from the extreme viewpoint of one of the sides in the issue? The phrase "Why Do You Hate In-App Purchasing Freedom?" could be rewritten "Why Do You Hate Me Exercising My Freedom To Steal Your Kid's Cellphone By Trading It For a Cheap Toy He Wants?"

    I'm sorry. The issue concerns In App Purchases that are engineered to allow gullible kids to rack up charges on their parent's phone.

    • by msauve ( 701917 )
      So, how do they engineer forcing the parents to provide a credit card to the kids? My understanding is that no purchases can be made unless an account password is entered - that's a parental responsibility. They're not preying on gullible kids, they're taking advantage of stupid and irresponsible parents. Such stupidity should be painful.
      • They're not preying on gullible kids, they're taking advantage of stupid and irresponsible parents

        Or parents who think that they can just let the kids do what they want now, to shut them up, and dispute the charges later with the credit card company. That way they don't "have to be the bad guy" with their kids either, by saying "no".

        It's really screwed up, and I've seen it most in broken families.

        My kids both have Android devices, and once in a while they'll get a gift card for a holiday, but by and large

      • My understanding is that no purchases can be made unless an account password is entered

        That wasn't always the case, and also a 15 minute window for "convenience" is clearly a loophole waiting to happen.

        If this isn't a scam, that window needs to pop up every single time the app is hitting the user up for money. I do not give my son my password, and I've already told him I don't pay for in-app purchases ever (because individually I hate the practice), so he either needs to be able to play without, or find ano

    • by Jiro ( 131519 )

      Whoosh.

      "Why do you hate freedom" is a phrase which, at least on Slashdot, is used only ironically. It means "this is the kind of thing which is pushed on the basis that everyone who hates it hates freedom". It doesn't mean that the person writing those words himself makes that claim.

  • by PopeRatzo ( 965947 ) on Saturday August 02, 2014 @09:03AM (#47588541) Journal

    What the fuck are these so-called "benefits" of a "15 minute open purchase window" that are so obvious and intuitive?

    Forget about "the children". Who is so badly damaged as a person that they feel that it's currently just too hard to buy stuff online?

    You know, I'm starting to think those kooks over at Adbusters might be on to something. We are one fucked-up society, and it looks like the marketing/industrial complex is in large part to blame.

    • by gnasher719 ( 869701 ) on Saturday August 02, 2014 @09:57AM (#47588743)

      What the fuck are these so-called "benefits" of a "15 minute open purchase window" that are so obvious and intuitive?

      Forget about "the children". Who is so badly damaged as a person that they feel that it's currently just too hard to buy stuff online?

      Let's see... I want to spend £10 on some music. So I go to the iTunes Store. Find a song that I like, click on buy, and I'm asked to enter the password for my AppleId. The song downloads. I go on looking for other stuff to buy. Find another song, click on "Buy", and I have to type in my password again. Bugger. I go on looking for more songs. Click on "Buy", and again I have to type in my password. Fuck that.

      Maybe it's hard to understand, but the same feature that allows _your_ bloody kids to spend _your_ hard earned money allows _me_ to happily spend _my_ hard earned money on things I like.

      • Find another song, click on "Buy", and I have to type in my password again.

        Jesus wept.

      • by Uberbah ( 647458 )

        Let's see... I want to spend ã10 on some music. So I go to the iTunes Store. Find a song that I like, click on buy, and I'm asked to enter the password for my AppleId.

        That's what online Shopping Carts are for. Or when buying stuff on Newegg do you click the "Checkout" button for each individual item?

      • A fifteen minute purchasing window is not something that is obvious to most people, but it's reasonable for adults and their own accounts, since it's just a convenience feature, and... well, they're adults. Hell, it can be even on by default. If you can't control your own purchases, no rules the government sets will make much of a difference as you destroy your own life.

        Where these companies crossed the line is by not requiring an authorization password each and every time a purchase is made from a depend

        • Thinking about this further, if I had a choice, I think I'd like to see separate options to allow or disallow that fifteen minute convenience window from crossing over to in-app purchases. For myself, I'm fine with trusting myself or the app store with that convenience. But it seems like giving an app blanket permission to charge my account whatever it wants for a limited time is a really, really bad idea. Call me paranoid, but I'd like tight security when it comes to what apps can take from my wallet *a

  • free market think tank

    pretty sure you mean wank tank

  • Companies are probably breaking all kinds of laws when they sell things to an 11 year old without parental consent. So who needs the protection? How about dad discovering that his 16 year old has racked up $1,500 in one month on cam girls? One answer to many problems is a strong, national ID card. A simple computer check could contact the card holder anywhere at any time in such a way a wayward child would be detected right away.
    • The problem is not the 15-year-old spending $1500/month on cam girls. The solution to that one is simple: don't let the 15-year-old use your credit card without supervision. Ideally, you'd keep some sort of tabs on his internet use, but teens are very adept at concealing behavior their parents would disapprove of. Moreover, a 15-year-old will know what he's doing and that he's spending money.

      Moreover, a national ID card would be pretty well useless in this. The child in either case is using the pare

  • I suspect states will have to form their own regulations because the federal government is fucked up by infighting and extremists.

    Some may feel letting states deal with it is a good thing, but it would also mean that app makers have to consider the rules of many different states.

  • It would make to so much easier for so many people if you could allow them to make purchases by simply looking at the buy button. It's one step past one-click!

    What about debiting the listeners credit card $1.99 for the full music track if they don't click stop within 30 seconds of a preview?

    It would benefit so many consumers.

    • Wait a minute.... no it wouldn't benefit a single consumer. It would benefit the company doing the selling and nobody else.

      My bad.

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