FTC Files Suit Against Amazon For In-App Purchases

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.

Comments

about time

[JoeJohnson2175]

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.

Re:about time

[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

[Anubis IV]

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.

Re:about time

[sandytaru]

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:about time

[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 who sign their awful agreement?

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

By allegedly exploiting and shorting their employees and having soulless fulfillment centers/neo-sweatshops?

Re:about time

[tlhIngan]

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 on Google Play? Here's Amazon.

Re:about time

[d'baba]

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.

Re:about time

[Anonymous Coward]

Yes, and that matters how? Did it get the job done?

As someone who worked in FC software, the teams were innovating in many ways outside of just what language was used. Should you care that stuff was written in ZPL? Doubtful, the printers worked well. Was some of the software clunky? You bet. Can you ask any developer from any company if that is the case and they will say yes? Of course.

All I can say is during my time there, software was written better and better practices were put in place to speed up logistics. Pick mods will be pick mods, and slams will be slams, but I personally think that with each new building opened and as each dev cycle passed, the software did improve.

Re:about time

[StripedCow]

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

Re:about time

[internerdj]

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?

too bad for the FTC

[Anonymous Coward]

they're not real and have no constitutional authority

Re:too bad for the FTC

[Anonymous Coward]

they're not real and have no constitutional authority

You're not real and have no constitutional authority!

Re:too bad for the FTC

[KingOfBLASH]

they're not real and have no constitutional authority

You're not real and have no constitutional authority!

Now now children, there's enough constitutional authority out there for everyone. :D

Re: too bad for the FTC

[Anonymous Coward]

I think you mean the UN

Re: too bad for the FTC

[Anonymous Coward]

Go fuck yourself libertarian swine.

You first, peon.

Re:too bad for the FTC

[x0ra]

Don't they have this right under the "Commerce Clause". [which is indeed known to have been abused, but still]

Re:too bad for the FTC

[stoploss]

Don't they have this right under the "Commerce Clause". [which is indeed known to have been abused, but still]

Your opinion, publicly stated, might negatively affect commerce, which could have ripple effects in the economy of another state. Ergo, your ability to state your opinion publicly is regulable under the commerce clause. Don't worry: you're free to express your ideas in your mind, so long as you do not communicate them to anyone else in any form.

This line of reasoning is consistent with the Supreme Court's ruling in Gonzalez v Raich, Wickard v Filburn, et al.

The Commerce Clause has been blatantly twisted into an unconstitutional interpretation. They baldly lie and say it means something it clearly does not (remember, those decisions I cited defined commerce as including "not commerce"). Once you assert B AND NOT B == TRUE, then you can apply this logical fault to reason to any conclusion you wish.

So, to answer your question: yes, they assert they have this power under the constitution (technically, it's improper to say the government has "rights").

It might even be one of those rare constitutional applications of federal enumerated powers if it were limited to interstate commerce, but we all know that's not the case.

Self incrimination

[Anonymous Coward]

If I'm a judge, can I hold my parents in contempt of court if they refuse to give me their in app purchase password so I can buy power ups?

Re:Self incrimination

[rmdingler]

No, but try the CPS 24 hour reporting number.

Failing to learn from history?

[Phroggy]

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

Re:Failing to learn from history?

[rmdingler]

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.

Re:Failing to learn from history?

[Anonymous Coward]

After they were nailed for it. I have two problems, the companies for not at least putting in some sort of system to stop this, and the idiots that are allowing their children to have access to to in-app/game purchases.

We are truly fu**ed as a country. I would love to see a lawsuit against the FTC, and the parents that allowed this behavior to take place. If anything just to send a message to both parents and government about using common sense.

The companies (and I do hate Amazon and pretty much all the other monopolies in this country) should also use common sense knowing you have idiots that lack any sense to better protect your company.

Why aren't you going after ISP's for providing a means to pirate? Where do you draw the line on what should be considered personal responsibility and creating laws/rules to punish everyone or deciding to loophole the rules only to punish certain people/companies.

I'm sorry if this is extreme but this is the way it should be.

Re: Failing to learn from history?

[Anonymous Coward]

They only "fixed" it because they were forced to. Apple would gladly have let the "issue" persist if it increased their profits.

Re:Failing to learn from history?

[Bob_Who]

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 start chopping off heads.

Re:Failing to learn from history?

[Anonymous Coward]

No, Apple still default to allowing this scam to happen, but they have added controls to reduce it, if you can find them and understand their obtuse language. It made Apple into one of the richest corporations in the world (as well as shady tax dodging expertise that us regular people have to make up the difference), Amazon merely want to follow suit.

Re:Failing to learn from history?

[parkinglot777]

The companies (and I do hate Amazon and pretty much all the other monopolies in this country) should also use common sense knowing you have idiots that lack any sense to better protect your company.

If you think it differently, you would see that common sense is not equal to profit. Big corporations (or any of those who are out to make more money) do try any business practice and hope they can get away with. In this case, they have a certain level of expectation on parents' to be able to foresee what their kids are going to do. They try to push the responsibility on parents and exploit the loop hole in order to get away with their business practice. So why do they care for common sense that many parents are idiot or short sighted?

Also, let me ask you this. How many big business out there that really care and apply common sense of their customers to their practice? They may start off with caring for their customers. Once their customers are locked in, at one point they all make their own rules and expect customers to follow. Now it becomes "take it or leave it." How many customers actually leave even though they make a complaint? This happens not only in the U.S. but everywhere else in the world. It is the business common sense to exploit other humans...

Where is section 5?

[sumdumass]

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

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

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

Re:Where is section 5?

[Bob_Who]

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

You actually attempted to read it.

Re:Where is section 5?

[itsdapead]

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.

Re:Where is section 5?

[Mister Transistor]

+1 Virtual Mod Point (out today, sorry!), Funny.

Re:Where is section 5?

[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 United States Code. Various folks have created an unofficial title 15 of the United States Code, which includes the FTC Act along with many other commerce related public laws. In the process of compiling title 15, they renumbered all the sections, with section 5 of the FTC Act become section 45 of title 15 of the United States Code. Because title 15 of the United States Code is not a positive law title of the United States Code, the proper citation is "section 5 of the Federal Trade Commission Act (15 U.S.C. 45)", with the parenthetical included to help the reader find the actual text.

Re:Where is section 5?

[sumdumass]

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.

apple system needed an password for free apps

[Joe_Dragon]

apple system needed an password for free apps the same one used to buy stuff also IOS used to have the 15 min no password needed time.

Why not have so there is a pin to buy stuff / setup it to only ask for a password to buy stuff and it's not needed for free stuff?

Re:Yuo 7ail it

[Anonymous Coward]

since then. More There are about 700 being GAY NIIGERS. Join GNAA (GAY insisted that

If there is a trolling equivalent to the Turing test, you just failed.

Re:Yuo 7ail it

[Anonymous Coward]

It's called the Turd Test, and I think he just passed it.

So called "designers"

[sjbe]

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 maximizes functionality and ease of use. Form should always follow function.

There are excellent Designers out there but like truly good Programmers they are a relatively rare bird. Even at companies like Apple where they have a reputation for good design you can see many examples of varying skill levels between the Designers and the "designers".

Interesting...

[BobMcD]

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

Re:Interesting...

[Himmy32]

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.

Re:Interesting...

[BobMcD]

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

That alone will hurt the model.

watch you kids

[Anonymous Coward]

Little Billy here is $100 to hold, go ahead and play in this candy store while i look the other way for 30 minutes.........OMG what happened to my $100 and where did you get all that candy, I'm gonna sue candy hut.

Re:watch you kids

[Himmy32]

A more apt comparison would be, Little Billy go play in the ball pit at the fast food restaurant. The restaurant has put a button in the ball pit that charges the parents credit card without the parents approval when jumped on. And in that case you think it's a problem that the parents would want their money back...

Parental responsibility

[ai4px]

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.

Re:Parental responsibility

[Himmy32]

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...

Re:Parental responsibility

[rochrist]

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.