Business

Apple’s shelling out $32.5 million to parents burned by their kids’ in-app spending sprees

Above: Apple is paying out millions to parents bought hundreds of dollars of in-app purchases without their permission.

NOTE: GrowthBeat -- VentureBeat's provocative new marketing-tech event -- is a week away! We've gathered the best and brightest to explore the data, apps, and science of successful marketing. Get the full scoop here, and grab your tickets while they last.

Parents whose children racked up hundreds of dollars in in-app purchases on Apple devices are getting their money back.

Apple has entered into a consent decree with the Federal Trade Commission, agreeing to refund the parents of children who racked up big charges in-app purchases without their explicit consent. The company is required to pay out a minimum of $32.5 million and notify affected consumers that refunds are available. Any funds Apple doesn’t dole out within 12 months must be remitted to the FTC.

If this all sounds a bit, well, repetitive, Apple agrees. Last year, the company settled a lawsuit over this very issue, offering iTunes credits and cash refunds to parents who sued over exorbitant in-app purchases, to be paid out this year. In a memo addressed to Apple employees and acquired by Re/Code, Apple CEO Tim Cook remarks that the FTC’s involvement “smacked of double jeopardy.” Apple chose to sign the consent decree and avoid a second protracted legal battle, as the FTC’s proposal “does not require [Apple] to do anything we weren’t already going to do.”

At issue is the ease with which children could dodge that parental consent requirement: After entering your password to make a purchase on an iOS device, there is a 15 minute window to make additional purchases without additional verification. Children were allegedly using this opportunity to rack up virtual goods in the games they were playing. The in-app charges on these apps range from as little as 99 cents to a hundred dollars — in one case, a parent reported that their child spent $2,600 on in-app purchases in a single game.

More information:

Apple designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes t... read more »

Powered by VBProfiles


We're studying digital marketing compensation: how much companies pay CMOs, CDOs, VPs of marketing, and more, with ChiefDigitalOfficer. Help us out by filling out the survey, and we'll share the results with you.