Apple, Inc.

Agency: Federal Trade Commission (FTC)Washington
Description:

On March 25, 2014, the Federal Trade Commission ("FTC") approved a Final Order resolving FTC allegations that Apple Inc. ("Apple") violated th FTC Act. The FTC conducted an investigation of certain acts and practices of Apple and allege consumers were unfairly charged for in-app purchases incurred by children without their parents' consent.The FTC Complaint further allege Apple does not inform account holders that entering their password will open a 15 minute window in which children can incur unlimited charges with no further action from the account holder. Additionally, according to the FTC Complaint, Apple has often presented a screen with a prompt for a parent to enter his or her password in a kid's app without explaining to the account holder that password entry would finalize any purchase at all. The FTC Complaint notes that Apple received tens of thousands of complaints about unauthorized in-app purchases by children and have reported millions of dollars in unauthorized charges to Apple. Apple offers many kid's apps in its App Store that allow users to incur charges within the apps. Many of these charges are for virtual items or currency used in playing a game. These charges generally range from 99 cents to $99.99 per in-app charge.

Under the terms of the settlement with the FTC, Apple has agreed to provide full refunds to consumers, paying a minimum of $32.5 million. The settlement requires Apple to modify its billing practices to ensure they obtain consumer's express, informed consent prior to billing them for in-app charges, and that if the company gets consumers' consent for future charges, consumers must have the option to withdraw their consent at any time. Apple shall provide an electronic notice to any Account Holder who has made an In-App Purchase prior to March 31, 2014 disclosing in a clear and conspicious manner that refunds are available for Account Holders that have been billed for In-App charges incurred by minors that were accidental or not authorized by the Account Holder. The electronic notice should also include that such refunds are available until the end of the Consumer Redress Period and instructions regarding how to obtain refunds. It is further Ordered that Apple and its successors for five years after the date of issuance of this Order, shall maintain and upon request make available to the FTC, business records proving their compliance with the terms and provisions of this Order. Apple and its successors are further Ordered to deliver a copy of this Order to all current and future principals, officers, and corporate directors, and to all current and future managers, employees, agents, and representatives who participate in implementing Apple's process through which Account Holders incur In-App Charges, and shall secure from each such person a signed and dated statement acknowledging receipt of the Order.

This Order will teminate on March 25, 2034, or twenty years from the most recent date that the United States or the FTC files a Complaint in federal court alleging any violation of the Order.