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Apple prodded FTC to investigate Google over kids’ in-app purchases

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Apple’s(s aapl) head lawyer quietly urged the Federal Trade Commission earlier this year to look into Google’s(s goog) in-app purchase policies — and was even helpful enough to send along a Consumer Affairs report that said Google Play let children “spend like a drunken sailor” on apps once a parent had entered a password.

The tale of corporate tattling was uncovered by Politico, which used a Freedom of Information request to obtain an email from Apple’s general counsel to FTC head Edith Ramirez and Commissioner Julie Brill. The email reportedly reads “I thought this article might be of some interest, particularly if you have not already seen it.”

The issue, which has been a problem for all big app stores, turns in part on so-called “bait apps,” which are available for free but then encourage kids to make in-app purchases while playing a game. Kids can do so even if they don’t know the purchase password, because app stores can allow short 15 or 30 minutes “windows” during which users can shop if someone has already entered the password.

The problem of bait apps drew national attention when after it was featured on the Daily Show in 2012, and has been a headache for parents everywhere, including Gigaom’s Kevin Tofel, whose kids spent $375 to keep virtual fish alive.

In the case of Apple, its decision to rat out Google came shortly after the company agreed to pay $32.5 million to settle FTC accusations over kids running up charges in the iTunes store.

Apple is now in the clear after settling with the FTC, and after forking over more money to issue refunds in a related class-action lawsuit the year before. The FTC, meanwhile, has since moved on to target Amazon(s amzn) over its own app practices, though the retail giant declared last week that it did nothing wrong and will fight the case in court.

As for Google, it’s unclear if the FTC is taking action over kids’ in-app purchases. While the two sides are likely in talks, consumers will not know for sure unless the FTC files a complaint or announces a settlement, since the agency doesn’t discuss ongoing investigations.

Google is also facing a class action case over its app policy, led by a mother who says her 5-year-old spent $65 while playing “Marvel Run Jump Smash!” on a Samsung Galaxy tablet. In a recent court filing, Google asked the court to dismiss the case on technical grounds.


6 Responses to “Apple prodded FTC to investigate Google over kids’ in-app purchases”

  1. russellleeo

    Who’s app store allows children to “spend like a drunken sailor.”?

    “GigaOm reports that the (Google) lawsuit stemmed from a mother in New York, who says her five-year-old son spent $65.95”

    “…the Cupertino company still shelled out more than $6,000 in order to cover the unauthorized purchases one British eight-year-old posted to her father’s account.”

  2. Richard

    On what planet is it fair for Apple to be fined over $32 million while Google pays nothing for doing the exact same thing? Presumably, the planet where it’s only wrong if Apple does it. In fact, maybe the FTC should go ahead and fine Apple another $32 million for making it possible for Google to do it by setting a bad example.

  3. Madlyb

    I am usually not a big fan of Apple, but I am in their camp on this one. Fair is Fair and Google (and Amazon) should be held to the same standards.

    While I think all of these ecosystems have dropped the ball from properly managing purchases, I would put a lot of blame directly on the FTC for their random approach to overseeing this area. It is not like this is new problem. Before AppStores, it was BlingStores (ringtones, wallpapers, etc.), and before that it was messaging, and before that it was PayPerView, and before that it was 900 numbers.

    At its core, the same guidelines and best practices still apply, but they enter each conversation like it is the first and generally only from an enforcement/punishment direction.

  4. This topic needs a rational view.
    1) We saw this with teenagers’ mobile messaging bills going to $100 / month. Did the FTC act?
    2) Apple was already taking comprehensive measure to reimburse parents, before the FTC acted against them.
    3) Is Apple a “rat”? Or is the FTC guilty of selective prosecution? I ask, sincerely, not with a political agenda. We want the FTC to defend us against predatory trade practices, and especially from giant corporations. It is equally important to know the FTC acts from principles applied fairly.
    4) Finally regarding both Apple and Google: It seems to me there are far more egregious offenders. See this one (FTC is finally acting) re T-mobile ‘cramming’

  5. Perhaps if Apple attempted being innovative again they wouldn’t have time and resources to waste their efforts on things like this…

    • immovableobject

      Right. Apple should just “innovate” more so everyone else can copy them. And all the while, Apple should be pleased to be held to account for its business practices while its competitors are given a free pass. How dare they expect to be treated fairly!

      And exactly how much time and resources did it “waste” in letting the FTC know that about Google’s abuses? In the time it took to drop a dime on Google, Apple could probably have designed and launched a whole new product line. Where are their priorities?!! /s