FTC Goes After Amazon For Kids' In App Purchases As Apple Begs FTC To Go After Google As Well
from the all's-fair-in-ftc-wars-apparently dept
As was expected since last week, the FTC has officially announced that it has filed a lawsuit against Amazon for the way it handled in-app purchases, specifically arguing that the company made it way too easy for children to rack up huge bills without realizing it. This comes about seven months after the FTC went after Apple over the same issue, but Apple agreed to settle with the FTC, while still pointing out angrily that it had changed its in-app purchasing process years earlier. Unlike Apple, Amazon has decided that it will fight, rather than settle.
This might not be that crazy. While there may be something to the fact that these companies should be more careful about keeping kids from buying lots of digital crap on their parents’ bills, when you take a step back, it does look like the FTC is deciding it can regulate the user interface decisions of internet companies, and that has some potentially troubling implications — especially with Amazon where its “one click” purchasing has become a part of its brand. That’s not to say the company shouldn’t reconsider how the shopping works on its mobile apps, but it’s not clear that the FTC really should be stepping in here.
Of course, in the meantime, Apple has decided that while it’s not happy about the FTC forcing it to settle, if it’s going to go through that treatment, Google ought to as well. A Politico FOIA request turned up an email from Apple’s general counsel, Bruce Sewell, to two FTC commissioners, basically saying “hey, Google is doing the same thing we’re doing…” by pointing to a Consumer Reports article that highlighted that Google’s in-app purchases allow your “kid to spend like a drunken sailor” for a period of 30 minutes (longer than the 15 minutes that got Apple in trouble). It was a rather obvious effort to create FTC problems for competitors, though it’s understandable that a company on the firing line is tempted to point out others doing the same thing.
This does seem like an area where the companies should be improving, based on consumer complaints alone (and there are many…), but it does raise questions about whether or not the FTC’s mandate really should go so far as to basic UI choices for certain companies.
Filed Under: ftc, in app purchases, kids, ui choices
Companies: amazon, apple, google
Comments on “FTC Goes After Amazon For Kids' In App Purchases As Apple Begs FTC To Go After Google As Well”
We're not talking about parents not watching their kids here.
We are talking about corporations preying on children in order to get at their parents’ wallets. The FCC stopped (rightly although not successfully so, IMO) toy companies from bombarding kids with ads, and none of those ads asked the kids to go to their parents’ safe, take out the money, and mail it to Mattel.
Stopping things like this is literally the central function of government.
Re: We're not talking about parents not watching their kids here.
“We are talking about corporations preying on children in order to get at their parents’ wallets.”
No, we’re not. Sorry, but you don’t get to fight hyperbole with hyperbole of your own.
What we are talking about is a rise in popularity of in-app rather than upfront purposes as the prevailing business model for games. We are talking about inadequate protections to avoid accidental purchases within those games, but this lack of protection applies equally to games aimed at adults, as well as children.
“For the children” might be the angle they’re going for here, and indeed games for children seem to have caused the biggest problems (mainly since children would be the ones least likely to understand the consequences of such purposes and least likely to be directly affected by errors). But, they weren’t the only group affected.
Call it what it is – an overall set of errors that affected both adults and children, but may have affected parents disproportionately due to their children not understanding the consequences of their actions. The complaint even states that kids who couldn’t read could accidentally trigger payments by bashing random buttons. That’s hardly a targeted marketing scheme. It’s an error in user interface design, nothing more.
Re: Re: We're not talking about parents not watching their kids here.
Candy Crush Saga, to name just one, is specifically targeted at children in their advertisements. To say that isn’t predatory behaviour is utterly wrong.
Re: Re: Re: We're not talking about parents not watching their kids here.
“Candy Crush Saga, to name just one, is specifically targeted at children in their advertisements.”
Funny… I know a lot of players of that game, including a huge number of people over the age of 18. Apart from the cutesy graphics, which part of the ad is aimed specifically at children?
On top of that, please feel free to point out the part of the ad that specifically aims the paid aspect of the game to children. It’s perfectly possible to complete the game without spending a single penny, and I don’t recall any part of the ad that pushes the paid part of the game to children. Cite your source if you’ve seen different, though.
“To say that isn’t predatory behaviour is utterly wrong.”
So, King.com must be in line for a lawsuit for their behaviour, right? Or, are you saying that Amazon are directly responsible for a 3rd party’s advertisements that cover all platforms the game is on, including those on competing platforms?
Re: Re: Re:2 We're not talking about parents not watching their kids here.
It’s perfectly possible to complete the game without spending a single penny
That. I’ll admit I play it and I got over 400 without spending a single penny. In fact my opinion is that you need to be incredibly stupid to pay for boosters like that specially considering it’s absurdly expensive.
However there are some apps that make your progress almost impossible if you don’t pay (or worse, if you don’t spam your ALL your facebook friends with its shit). I usually drop those.
Re: Re: Re:3 We're not talking about parents not watching their kids here.
“In fact my opinion is that you need to be incredibly stupid to pay for boosters like that specially considering it’s absurdly expensive.”
It’s all about moderation. I know people who’ve literally been stuck for months and opted to pay to make it easier. I also know people who didn’t need any at all, but opted to pay anyway as a token for having had so much free entertainment. I can’t fault those people, even though I have no idea who in their right mind would want to buy the more expensive stuff on there.
“However there are some apps that make your progress almost impossible if you don’t pay (or worse, if you don’t spam your ALL your facebook friends with its shit). I usually drop those.”
Agreed. But, that’s not the claim I was responding to. I was responding to the claim that Amazon (not King) were directly advertising a paid product to children with that game.
That argument doesn’t hold any water with me even if it was a paid game, but doubly so since you don’t have to pay to enjoy it.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
I can’t fault those people, even though I have no idea who in their right mind would want to buy the more expensive stuff on there.
I’ll admit yet again that I’m kind of in a quest with some friends to see who gets to the last available level first but honestly the game simply decides if you are going to win. I was stuck in one level for over a month already and suddenly when I played last night the game simply played itself with very little input from me. I even had used tons of accumulated boosters from that roulette to no avail. Why pay for something that doesn’t really benefit you? As for a way of supporting the creators I honestly had not thought of it even though I’ve done it before (ie: I bought Minecraft for android because I like the author even though I don’t like Minecraft itself). So guess I’m stupid lmao or maybe I just dislike how Candy Crush is all about luck instead of skills and this just made me biased.
That argument doesn’t hold any water with me even if it was a paid game, but doubly so since you don’t have to pay to enjoy it.
Indeed.
Re: Re: Re:5 We're not talking about parents not watching their kids here.
“I’ll admit yet again that I’m kind of in a quest with some friends to see who gets to the last available level first”
I have a friend who did that a lot… just in time for the next app update that added 20 levels! Competing among friends is great but until it stops being profitable enough to update, you’ll never “win” it.
Re: Re: We're not talking about parents not watching their kids here.
PaulT,
There’s a tremendous difference between business model and extortion, and too many of these apps are extortion in their design.
It’s a gray area, for sure, but it shouldn’t be so gray as to scream “IF YOU WANT THE BETTER PART OF THIS APP, PAY UP” (or we’ll cap your app in 3… 2… 1…).
Candy Crush, since it was brought up, is an extortion app. The idea we deal with ads to play is THE business model we’re expected to “pay”. When an app, even with ads, decides to stop working, that’s extortion.
To bypass this extortion, people pay real money to access the app they should have had the ability to use 100% for free because of the ads.
“Boosters” aren’t the issue here. The entire app’s setup is the issue, and this can, and does, cause people to spend money when A) They’re not familiar enough with the game that they didn’t realize they didn’t have to pay for gold bars) and B) Have been taken advantage of due to the momentary lapse in addictive behavior (and this is a real thing).
The other issue is the common Bait & Switch, where apps are being advertised to contain “X, Y, and Z”, and you download only to discover these require additional payments.
Personally, I feel the FTC is wasting its time with Amazon.
The FTC should be going after these app developers who are pulling this crap on people.
To blame Amazon sets up an extremely dangerous precedence: blame the messenger.
Re: Re: Re: We're not talking about parents not watching their kids here.
“Candy Crush, since it was brought up, is an extortion app.”
Funny, I’ve never paid a penny on it even though I’ve completed several hundred levels. Why haven’t I been extorted?
“they should have had the ability to use 100% for free because of the ads.”
They DO have that ability.
“They’re not familiar enough with the game that they didn’t realize they didn’t have to pay for gold bars)”
The pop up asking them how much they want to pay wasn’t enough of a clue? The screens in question do have the prices clearly displayed. Why didn’t they just complete the game without those things since they have that option? Do they really have a habit of giving money to random programs before they know how they work?
“Have been taken advantage of due to the momentary lapse in addictive behavior (and this is a real thing).”
There’s an argument that King et al depend on people with gambling problems or poor impulse control. There’s also an argument that most people who play those games have no such problems. That’s a different discussion to the one in this instance, though. I just don’t see how this specifically targets children – your argument applies to adults, and is a much wider discussion.
“The FTC should be going after these app developers who are pulling this crap on people.”
This is true. Say whatever you want about Candy Crush, neither Apple nor Amazon made the game.
Re: We're not talking about parents not watching their kids here.
Stopping things like this is literally the central function of government
I’d like to disagree on that.
While I find it a reprehensible practice along with the zepter like “sell useless garbage for outrageous prices to senile elders” business model, I think it’s ultimately society’s responsibility to deal with this kind of shit.
Government bodies should compel corporations to fair play (ie, not lying to it’s customers like zepter, scientology, homeopathy etc).
In this case, it is the parent’s goddamn responsibility to teach their kids how to behave, and in the meantime lock them away from the possibility of 1 click purchases. Don’t leave your fuckin’ CC info in the phone, or where the kids can find it, just as you don’t leave your gun where they can find it.
To sum it up: start treating citizens as responsible adults!
Re: Re: We're not talking about parents not watching their kids here.
That. My phone is off-limits to any kid unless I’m directly supervising them while using (meaning I’m actively participating). If you want them to play too buy them a gadget and lock the configurations. Shouldn’t be an issue nowadays.
Re: Re: Re: We're not talking about parents not watching their kids here.
“lock the configuration”
Amzn has a kids mode, but it’s not free. There used to be a free 3rd party app available from Amzn but guess what – it disappeared around the same time that the paid Amzn monthly service appeared.
Re: Re: Re: We're not talking about parents not watching their kids here.
That. My phone is off-limits to any kid unless I’m directly supervising them while using (meaning I’m actively participating).
Do you have your own kids?
Re: Re: Re:2 We're not talking about parents not watching their kids here.
My 11 year old has his own Android phone, and plays games on it. (Frequently. Those of you with kids will know what I mean.)
He has his own Google account, which doesn’t have my credit card on it.
I don’t see the problem.
Re: Re: Re:3 We're not talking about parents not watching their kids here.
And if your 11 year old picks up your phone when you are in the shower and spends $1000 on in-app purchases on a game you happen to have on your phone, what is your liability?
Now, what if it’s your neighbor’s kid that was just at your house playing?
I think there are a few fuzzy areas.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
Doesn’t happen, phone is locked.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
Maybe not as fuzzy as all that. If you leave your wallet out while in the shower and your kid (or neighbor’s kid) starts playing with your wallet and relieves you of $1,000 (and spends it), the issues seem about the same to me.
1. Your own security practices. If you treat access to $1,000 casually on your electronic device, don’t expect others to treat it seriously.
2. As with cash, avail yourself of parental and/or legal recourse to recover damages.
Where government protection would help most is in better protections (as with credit cards) to give consumers time to report false usage and not be liable. In fact, there may already be protections in place where device purchases are charged to a credit card. Either way, if companies stop making money from “fuzzy area” purchases, they will adjust their practices to market more appropriately.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
put a password on your phone. dont store you credit card on your phone.
Re: Re: Re:2 We're not talking about parents not watching their kids here.
Not yet but I advised my cousin on the issue and a friend of mine had this problem recently. She bought a cheap tablet and filled it with videos and games for her daughter and that’s it.
Re: Re: Re:3 We're not talking about parents not watching their kids here.
Not yet but I advised my cousin on the issue and a friend of mine had this problem recently. She bought a cheap tablet and filled it with videos and games for her daughter and that’s it.
Lots of things are good in theory, but impossible in reality. We let our eldest kid use an old phone that’s no longer in service at times, and that’s limited. But still, he’ll often want to use mine or my wife’s phone for something or another, and you CAN’T always watch over him or refuse. There’s just some practicality there, where some of us try to teach our kids to be careful and good when using these devices, knowing that it’s impossible to watch over them or tell them no every time.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
some of us try to teach our kids to be careful and good when using these devices, knowing that it’s impossible to watch over them or tell them no every time
Agreed with that. Education is the best way to go as they age though it’s hard to define at which age you’ll relax your restrictions. Still, I seldom let people use my phone and I even when its adults using I always keep an eye. Guess I’m kind of paranoid or something heh
Re: Re: Re: We're not talking about parents not watching their kids here.
It’s not quite that simple. I have a toddler, and if he picked up my phone and 1-clicked a car from Amazon (I assume they sell those now), it would be my own fault for letting him play with my phone.
However, a 12 or 13 year old is more than capable of using a digital device unsupervised and could unwittingly spend a load of cash on me. You can argue that, as a parent, I should not have apps on my phone that aren’t password protected for in-app purchases, but some don’t allow you to do that at all.
I would like to see some solutions that don’t involve the government making decisions about how apps can work, but I can also see situations in which the owner of a phone should not be made liable for purchases made by someone else with their device – particularly a minor.
Re: Re: Re:2 We're not talking about parents not watching their kids here.
Lock your phone with a password?
Re: Re: Re:3 We're not talking about parents not watching their kids here.
I mean, the entire phone, not only the apps. Also if you can’t lock in-app purchases lock the pp themselves. Avast for instance allows locking of specific apps.
Re: Re: Re:2 We're not talking about parents not watching their kids here.
Michael I hadn’t understood the issue here and I’m guessing neither did you. The companies assume you don’t want to be bothered by those permissions for a while after you make a purchase. So basically it would be like you buying 1 thing for the kid and them leaving at that (because everything else is locked) but Apple/Google etc give some minutes of “grace” where you don’t need to input the permission again.
So yeah, that could be a problem and maybe they should add some checkbox “don’t ask again for x minutes” or something. Though it can still be avoided by removing the card from the account afterwards (I still wouldn’t let my kid use my own device).
Re: Re: Re:3 We're not talking about parents not watching their kids here.
Yep, the problem is the balance between convenience, security and commerce. The ideal situation commercially is for users to be able to buy at any time (Amazon’s original default as claimed in the article’s history). This obviously represents total convenience but no security.
They could go the other way, which is to demand a password every single time you access certain content or areas of the device (often the same password is used for parental blocks other than the credit card and account info). This is great for security, but can be frustrating for users (and would lead to some lost revenue from those customers who would otherwise be trying to buy things).
So, they’ve compromised, requiring a password the first time you try to buy something, but allowing a grace period during which the password is not required for additional purchases. Great for someone trying to buy several items or browsing a store, casually picking up what they fancy. Not good for someone handing their device back to a 3 year old who will randomly press buttons.
There’s some refinement required, and they need to be held liable for any losses their poorer design choices have caused. But, deliberately targeting children? I don’t buy that.
Re: Re: Re:4 We're not talking about parents not watching their kids here.
That.
Re: Re: Re:2 We're not talking about parents not watching their kids here.
“However, a 12 or 13 year old is more than capable of using a digital device unsupervised and could unwittingly spend a load of cash on me.”
True, but I’d argue that any design flaw that allows a 12 or 13 year old to honestly spend money without realising it (rather than just using that as an excuse when caught) is a design flaw that allows their parents or any other adult to do the same. That’s a rather different argument to the one presented here.
Re: Re: parents not watching their kids here.
Let’s run through these one by one.
1/ when you buy a phone you have to register a credit card as part of installing the phone (iTunes). Your credit card is stored with the company. It is not something you can hide from the kids.
2/ these in app purchases are not design errors. They are an integral part of the App. The company designs them to make money.
3/ the phone manufacturer (Apple, Amazon etc.) provides the marketplace.
4/ even a 2 year old is aware enough to try to buy things online. A 3year old is very sophisticated with devices. However they don’t know what money is.
5/ for that reason Apple took reasonable step to protect parents from accidental purchases. They even did it years before the FTC complaint. I love the way Apple regulate in App purchases.
6/ if Amazon doesn’t fix this problem, there are two results. Ppl with kids don’t buy their phones. Ppl with kids (that’s a lot of people) complain and the law gets to regulate Amazon’s marketplace.
Ultimately Amazon had two choices – fix it or someone will fix it for them in a way they don’t like.
Re: We're not talking about parents not watching their kids here.
Google doesn’t exactly do this preying on children via apps thing.
In-app purchases are by default password locked on android. So, they already have a model in place.
Apple’s tit for tat is merely acting like a child.
Re: We're not talking about parents not watching their kids here.
Really amoshias?
A central function of government is to decide how difficult a company must make in app purchases for people so parents do not have to take any extra steps with their children?
I will take a moment here to state that people like you have caused my coffee to be cold. My products to be more expensive and have allowed many people who would have otherwise died in horrible Hair Dryer in Shower accidents to breed.
You should feel shame.
I’m sorry, but I’m confused. How are the kids buying stuff? Doesn’t it require a credit-card?
Re: Re:
The games rely on a preregistered credit card associated with a user account. Once logged in, one click shopping is enabled, with no requirement for confirmation. It’s another case of convenience over security.
Re: Re: Re:
But why would the kids have a user account with a CC registered to it?
Re: Re: Re: Re:
“But why would the kids have a user account with a CC registered to it?”
On Amzn devices (Kindle, Fire) the content comes from the purchasing account so eg buy a Fire tablet, buy some Kindle books, subscribe to Prime to get Prime Video, buy some movies etc and that content is associated with the purchasing account (the one with the c/card). That’s the same account the device must be registered with in order to view the content. Amzn have been asked many times for sub-accounts or some other way to share content but so far they have not come up with a solution.
Re: Re:
No, not always. On a pay-as-you-go Android, for example, you can make purchases using your phone’s credit, and I imagine the procedures are simplified if you’re on an account. That’s why my accounts are always logged out before I hand my phone to anyone.
Re: Re: Re:
With an android phone that’s tied to a Google account, the default setting is that you have to enter your google acct password every time you want to pay for something using that acct. You have to intentionally decide to turn that off.
cost/benefit
“This does seem like an area where the companies should be improving, based on consumer complaints alone”
Probably a quick cost/benefit analysis told them they’ll make more movey off of kids’ purchases then they’ll loose from parents not buying stuff due to the risk of their kids making purchases. Money talks.
Google is fine
I have to enter my password in every single time I buy something on my phone with Google Wallet, including Play apps and in-app purchases. What is the issue here?
My kids take money from my wallet all the time when I leave it lying around the house. These wallet makers should require a password to take money out. The government should sue them.
Really guys? I’m amazed most of you feel this way. Because parents are too lazy or too stupid to know what their kids can do with the shiny new device they just bought them the parents should be the ones who take the hit.
Easy fix
Android has an easy fix to this problem already: you can set it to require a password to complete in-app purchases. I assume that iPhones have a similar feature, but I don’t know. I don’t see the need for governmental intervention at all for this — parents should just set the password.
Not convenience, but consumer control at stake here
I found it incredibly presumptuous recently of Apple to want a credit card number just to access it’s “Free” apps on its app store, when my company had supplied my phone to me.
Consumers obviously have very different approaches to spending money. The model needs to support not only the spendthrifts, but also the tighwads for whom an “in app” purchase is a rarity, and provide an easy way for a given consumer to make that choice — just as for amazon books, where “one-click” purchasing is an option you turn on and off.
This is what’s missing: Parents (and phone owners in general) cannot turn off the ability to accidentally make purchases. That’s plain wrong, and it’s exactly the sort of predation we need a government to control, especially in the very dysfunctional phone markets.
Refunds
I don’t see it so much as the FTC regulating interface design as they are regulating refund policies. Which may flow downstream and effect interface design.
Good God
What is wrong with you people, do you not remember the problems with predators and kids doing stupid things on the internet and getting in all kinds of trouble during the late 90’s and early 2000’s?
Never let your kid on a mobile device with a camera (thats how nudies are taken and sent) they should not have a laptop that they can hide with, thats where even more shit goes on.
Your kids should be stuck at a desktop computer in a open area of the house that anyone can come and see what they are doing at any time. If they start closing things when you get there well they lose their computer privileges completely and you can then lock the computer and have a tech savy friend find out what they were doing.
We need to take away these mobile platforms for kids as they are not mature enough to use them responsibly. Think back to when you were a kid and remember how much of a dumb ass you were.
Re: Good God
That’s much too broad of a brush. Kids are not some monolithic block. I know kids who are much more responsible and level headed than most adults.
Re: Re: Good God
Agreed. That might be the case at younger ages but as the kid gets older the best security measure is to talk to the kid and make him aware of the dangers. Depriving them from access to such gadgets is hardly a solution at all.
Re: Re: Good God
Kids are not responsible enough to have these gadgets. Just look at society today. Most kids can not even hold a conversation. Until then they need to be treated as monolithic blocks.
Re: Re: Re: Good God
They are as responsible as the education their parents gave them. Also, the concept of “kid” varies. If you are talking about a 4-yr old then you might have a point but above 10 it’s all dependent on their education. And I don’t mean school or something.
Re: Re: Re: Good God
Whether or not kids can be trusted with these gadgets depends on the kid. It’s the parents who are responsible for making that determination, not you or I.
Amazon, Apple, and Google only provide the platform. If the FTC is to go after anyone, it should be the ones who use the platform in a deceptive manner. Next they will go after PayPal for the fact that people can spend ridiculous amounts on online auction items.
You know, I allow my six-year-old cousin to use my Android all the time and I’ve never got any shock bills. Maybe to join that club I need to either just keep my phone signed in or allow it to remember my log-in details for my accounts. The stupid, it burns!
Apple
> It was a rather obvious effort to create FTC problems for
> competitors, though it’s understandable that a company on
> the firing line is tempted to point out others doing the same
> thing.
It’s more than understandable that they were just tempted. It’s a perfectly legitimate response from anyone, where the government steps in and says, “You can’t do this”, to point out that, “Hey, everyone else is doing the same thing, why are you only coming after me?”
So perhaps the actual solution to these things would be the most shockingly simple answer.
Make parents be responsible.
Would we force a store to refund money to parents if their child took $20 out of their wallet and went shopping without permission?
Perhaps rather than supporting the idea that everyone else is responsible for watching your kids, maybe expect that parents need to understand that passing the couple hundred dollar babysitter to their kids means they should make sure it is appropriate.
Maybe it is the parents who should read the screen that says how long buying is allowed for after they quickly just swipe in the password to make the kid stop bothering them.
Companies are trying to balance the needs of their adult consumers & the demands of adults who just want another pocket babysitter they can hand their offspring off to.
Companies could setup limited accounts with all of the super protections needed, password each time someone wants to buy in app, all of the bells and whistles…. and we would still have people screaming about the kid spending their college fund on stuff in an app because it was to hard to set stuff up or to type it in each time.
Companies sell things, if you expect a company to be responsible for watching over your kid you suck as a parent.
More details on the issue...
There is more at play here than just a question of parents not taking reasonable precautions. According to this article, Amazon’s systems initially allowed for in-app purchases without the need to enter a password. In addition, some of the apps were designed to blur the lines between virtual items purchased with credits earned while playing the game and those purchased with real money. Despite Amazon employees raising concerns (in emails and documentation obtained by the FTC), Amazon took its own sweet time instituting safeguards to prevent accidental, unintended and unauthorized in-app purchases, instead choosing to stand behind a “no refunds” policy.