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Google settles with the government for $19 million over in-app purchases
Don't think that Apple and Amazon are the only ones currently in the FTC's crosshairs over their in-app purchasing policies. But while Jeff Bezos and company are fighting tooth and nail, Google has decided simply settle with the government and offer refunds to parents whose children went a little overboard with the in-app purchases. Mountain View will issue full refunds to those who were charged for unauthorized purchases made by their kids. That will mean a minimum of $19 million dollars is being returned to angry consumers, though that's mere pocket change for the internet giant. That's also significantly less than the $32.5 million Apple settled for, though it remains to be seen how much Amazon will be hit for if it fails to fend off the FTC's lawsuit.
Fandango finalizes a truce with the FTC after exposing your movie ticket data
Fandango slipped up in a big way between 2009 and 2013: its mobile apps would send your movie ticket purchases without a basic security measure, leaving credit card info and other data vulnerable to theft. However, the company is about to make amends for playing fast and loose with your personal info. The FTC has just approved a settlement with Fandango that will require the movie service to follow the straight and narrow. As agreed to in March, Fandango has to implement new procedures that address security concerns in apps before they reach the public; it will also have to get independent security reviews every other year for the next 20 years. The remedy won't help much if someone swiped your banking details while you were watching a summer blockbuster, but it should at least reduce the chances of a movie-related breach in the future.
FTC busts up $275 million credit card scam, sues the folks behind it
The folks down at the Federal Trade Commission are busy helping all of us these days, whether they're weighing in on patent disputes or forcing firms to help cover your child's lack of parental supervision. Today, the FTC charged several companies and individuals with participation in an elaborate shell game from 2010 that was really just a $275 million dollar credit card scam. According to a separate, ongoing lawsuit filed by the Commission, a company called I Works did the stealing, but wouldn't have been able to take $26 million of the total without the aid of the defendants in this new lawsuit.
FTC sues Amazon over in-app purchase practices
The U.S. Federal Trade Commission has sued online retailer Amazon for refusing to change its framework for purchases made within its hosted mobile apps, according to a Reuters report. The lawsuit is an expected result of Amazon's denial of FTC-issued requests to change its in-app purchase policies. To meet FTC guidelines, Amazon would need to add another layer of password protection and overhaul its refund policies in order to curb in-app purchases made by children without parental permission. In a recent letter to the FTC, Amazon noted that it prefers to "defend our approach in court," rather than change its policies. The FTC's lawsuit seeks refunds for affected customers and a ban on unlimited purchases within Amazon apps. Apple issued more than $32.5 million in refunds to App Store customers following a similar FTC complaint earlier this year. [Image: Amazon]
The FTC is taking Amazon to court over its in-app purchase policies
Earlier this summer, the Federal Trade Commission (FTC) warned Amazon that if it didn't adopt a more Apple-like policy about in-app purchases, it might wind up in court. Now, it has. Today the FTC announced that it's seeking a court order requiring the online retailer to issue refunds to parents whose children ran wild with in-app purchases -- unauthorized charges, the FTC says, that racks up into the millions. Much of the alleged blame is focused on Amazon's past. According to the FTC, Amazon had almost no protection against unwanted in-app purchases in 2011, and has only implemented adequate consent framework recently. The government's concern seems to lie squarely on customers left in the lurch: Amazon's official policy says that all in-app purchases are non-refundable, and the exceptions to that policy are "unclear and confusing."
Amazon fighting FTC's demands over in-app purchases
Amazon has denied a Federal Trade Commission request to restrict add-on purchases made within its mobile applications, the Wall Street Journal reports. As part of the FTC's terms, Amazon would need to clearly warn users of real-money transactions within its applications, require password entry for in-app purchases, and overhaul its refund process to aid parents seeking recompense for unwanted purchases made by children. In a letter to the FTC this week, Amazon stated that it prefers to "defend our approach in court," rather than agreeing to change its terms and accept FTC-issued fines. "When customers told us their kids had made purchases they didn't want, we refunded those purchases," Amazon associate general counsel Andrew DeVore said in the company's mailed response to the FTC. Refuting the need to change company policy, DeVore noted that Amazon currently implements "prominent notice of in-app purchasing, effective parental controls and real-time notice of every in-app purchase." Apple issued $32.5 million in refunds to iTunes App Store customers earlier this year in response to a similar complaint from the FTC. The FTC has not yet responded to Amazon's latest statement. [Image: Amazon / Engadget]
Amazon refuses to bend to the FTC's demands over in-app purchases
The Federal Trade Commission (FTC) wants Amazon to update some of its policies regarding in-app purchases, but the retail giant is having none of it. According to documents obtained by the Wall Street Journal the company is facing a lawsuit that would require it to pay hefty fines and dramatically alter its record keeping and disclosure practices. In particular the government is concerned about purchases being made by children, but Amazon thinks its approach is sound. In fact, not only is the company refusing to change its rules, it said in a letter (PDF) that it's prepared to go to court.
FTC says T-Mobile has let text message scams run wild (Update: T-Mobile responds)
Is your cell phone bill running a little high? You might be suffering from unauthorized third-party charges, a type of text messaging subscription scam that bills users for SMS-delivered celebrity gossip, horoscopes, quizzes and other content. Consumers can choose to sign up to these services manually, but are often duped into signing up to them through fraudulent and deceptive advertisements -- causing charges in upwards of $9.99 to appear on their phone bill without their authorization. It's a practice the Federal Trade Commission calls "cramming," and it says T-Mobile as been allowing these scammers to charge its customers unchecked for far too long. Now the FTC is taking the carrier to court, demanding it issue refunds to the customers it failed to protect.
The FTC wants to help you control how you're tracked online
Brokers are collecting and selling information about where you go and what you do online, and you might not even realize it's happening. According to an FTC report Tuesday, data brokers are compiling profiles on Americans, and then peddling that info to marketers and even politicians who want to target them. That's not anything new, however, the FTC is now recommending that Congress take a look at the industry and consider regulating data broker's collection practices.
LifeLock pulls its wallet apps, deletes data in light of security worries
Wallet apps are typically more convenient than trying to keep tabs on a slew of identity and payment information yourself. However, that assumes that the apps are secure in the first place -- and unfortunately, LifeLock is learning this the hard way. The ID protection firm has both pulled the LifeLock Wallet mobile app and deleted user data after learning that its tool (based on recent acquisition Lemon Wallet) "may not be fully compliant" with payment card security standards. While there's no sign of a breach, the company says that it would rather play it safe and only restore the apps once people can trust them "without question."
The TUAW Daily Update Podcast for May 8, 2014
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get some the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the player at the top of the page. The Daily Update has been moved to a new podcast host in the past few days. Current listeners should delete the old podcast subscription and subscribe to the new feed in the iTunes Store here.
Snapchat settles with the US government for deceiving users
As privacy has become harder to hold onto in the digital age, the appeal of Snapchat was obvious; no matter what you sent, your photo would be deleted within ten seconds. Of course, what sounded too good to be true ended up being exactly that. There are simple workarounds that allow for screen shots of embarrassing or scatological images, and the company itself has admitted to giving over certain pictures to the police. Understandably some people and entities were ticked off by Snapchat's false claims, including the federal government. According to the New York Times, Snapchat has settled a deal with the Federal Trade Commission (FTC) for lying to customers about the ability of their snaps to really "disappear forever." Don't worry though, investors -- this settlement is purely a light rebuke of the company. In fact, Snapchat wont be fined a dime. The New York Times description of the settlement sounds like the company is getting sent to its room without dessert: Under the terms of the settlement, Snapchat will be prohibited from misrepresenting how it maintains the privacy and confidentially of user information. The company will also be required to start a wide-ranging privacy program that will be independently monitored for 20 years. Fines could ensue if the company does not comply with the agreement. Beyond the numerous ways Snapchats can be saved, the FTC also warned the company that the app collects data like your contacts and transmits users' locations despite telling customers that it wasn't doing that. This news probably won't stop anyone from Snapchatting, but think twice before you send that next funny picture of your cat. You're just using it to send pictures of your cat, right?
Snapchat settles with FTC for misrepresenting its ephemeral nature, gathering user data
Snapchat has been a popular choice for those looking to send temporary messages that will soon disappear forever. Well, the auto-erase feature wasn't without flaws, and now the mobile outfit has settled with the Federal Trade Commission over it. The FTC has announced that it had reached an agreement with Snapchat for misleading users about the ephemeral focus of the app, after the commission found that users could easily save messages with third-party apps and other tricks. Despite claims to the contrary, the complaint alleges that the software gobbled up location details and other user info (like contacts) which allowed researchers to build a database of over four million user names and their matching phone numbers.
FTC: State bans on Tesla's direct sales model are hurting competition
Tesla has just gained a valuable ally in its battle to sell cars directly to customers: the Federal Trade Commission. The regulator now argues that state bans on direct sales are "protectionist," propping up the traditional dealership business model rather than protecting companies from unfair abuses by automakers. It's the "competitive process" that should decide which sales model is better, not the law. The FTC also doesn't buy the notion that Tesla's modest US sales (22,500 in 2013) are a threat to the wider industry (15 million). It believes that the only thing at risk is the old way of buying cars, which might not be necessary now that customers can skip the sales pitch and do most of their research online.
US government approves Facebook's purchase of Oculus
We're not sure there was ever much doubt, but the US government has given the thumbs up to Facebook's $2 billion purchase of Oculus VR. The Federal Trade Commission examined the deal and found that it would not violate American antitrust laws. Now with most of the regulatory hurdles cleared, the focus can shift to the practical implications of the deal. Joining the Facebook family clearly puts a vast amount of resources at the disposal of Oculus founders like Palmer Luckey. But many in the development community are worried that the move represents something of a loss of innocence. Notch, the man behind Minecraft, in particular is apparently creeped out by Facebook and what it's business model and culture could mean for the future of the Rift. We can't pretend to know what's coming -- we're not even sure that Mark Zuckerberg or Oculus are sure what the future holds yet. All we can say is that we really hope a VR version of Facebook isn't in the cards.
US will force Facebook to protect WhatsApp user privacy
When Facebook bought WhatsApp, some were worried that the messenger would go back on its promise not to collect swathes of personal data in the style of its new owner. Luckily for you, the FTC has other plans, and will only give its blessing to the $19 billion deal if both companies swear to respect WhatsApp's original user agreement. In a letter to the pair, FTC consumer protection chief Jessica L. Rich has said that if WhatsApp pulls a privacy bait-and-switch , then Zuckerberg and co. will be in breach of section five of the FTC act, with harsh penalties to follow.
Apple settles with FTC, agrees to pay out $32.5 million to customers in IAP suit
Apple has agreed to issue more than $32.5 million in refunds to iTunes App Store customers who incurred unwanted in-app purchase fees within kids' mobile apps, settling a complaint registered by the Federal Trade Commission. The FTC's complaint found that 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." As a result, many parents racked up significant iTunes bills when their children took advantage of the loophole to purchase virtual items, currency, and other in-game bonuses without permission. The FTC notes that Apple has received "tens of thousands of complaints" from affected parents in the years following the App Store's launch. One child reportedly spent $2,600 of her mother's money in Tap Pet Hotel, and several parents were hit with hundreds of dollars in fees after their children played games like Dragon Story and Tiny Zoo Friends. The UK's Office of Fair Trading levied similar complaints last year when it launched an investigation targeting pressured purchases in childrens' apps. Apple previously issued over $100 million in iTunes gift certificates to reimburse unwanted fees from Capcom's microtransaction-supported Smurf Village.
Daily Update for January 15, 2014
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get some the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the player at the top of the page. The Daily Update has been moved to a new podcast host in the past few days. Current listeners should delete the old podcast subscription and subscribe to the new feed in the iTunes Store here.
FTC says Apple's gotta pay for your kids' in-app purchases
In my day, when a kid spent his parents' money when he wasn't supposed to, a form of indentured servitude ensued to pay off the debt. These days, courtrooms and federal agencies are the parentally-preferred sources of remuneration. Today, Apple settled up with the FTC over a complaint filed by the Commission many moons ago regarding in-app purchases made by children without mom or dad's consent. Why should you care? In truth, you shouldn't. See, Apple already went to court over this very issue, and agreed to refund these unwitting customers hoodwinked by their genetic spawn months ago at the conclusion of a class-action lawsuit. Thing is, the FTC complaint is separate from that lawsuit, despite the fact that it concerns the very same issues -- today's announcement merely tidies things up by putting the issue finally and completely to rest. The outcome of both settlements is that Apple modifies its billing practices to get express, informed consent before allowing in-app purchases, and allow that consent to be withdrawn at any time before the end of March. Additionally, Apple's gotta refund at least $32.5 million dollars to affected customers, and should it send out less money in settlements, then the difference will be paid to the FTC. Apple's not so keen on the FTC's announcement, but an internal memo from Tim Cook obtained by Recode confirms that this settlement with the Commission is entirely duplicative of Apple's ongoing lawsuit settlement efforts. Gotta love governmental redundancy, right?
Breaking: Apple agrees to FTC consent decree on in-app purchases (Updated)
Re/code reported earlier this morning that Apple has signed a consent decree with the Federal Trade Commission (FTC). This agreement is intended to resolve complaints that the company didn't go far enough in preventing kids from making in-app purchases without understanding that there was real money involved. Update: At a Washington, DC press conference this afternoon, FTC chairman Edith Ramirez noted that Apple will refund at least $32.5 million to consumers to settle the case in which children had made in-app purchases without their parents' consent or knowledge. That $32.5 million figure is a minimum -- Apple must pay full restitution to consumers for the unauthorized purchases, so the number could be bigger. Apparently, if the number paid out is less than $32.5 million, Apple will pay the difference to the FTC. Apple also has until March 31, 2014 to revise its billing system to make it more obvious that an actual purchase is being made during a game and to make sure that consumers have given their informed consent before being billed for in-app purchases. Last year, Apple settled a lawsuit over unauthorized use of IAP in games and apps, but apparently the FTC decided that wasn't enough. Apple CEO Tim Cook sent an email to all employees this morning explaining the company's decision: From: Tim Cook Date: January 15, 2014 Subject: FTC announcement Team, I want to let you know that Apple has entered into a consent decree with the U.S. Federal Trade Commission. We have been negotiating with the FTC for several months over disclosures about the in-app purchase feature of the App Store, because younger customers have sometimes been able to make purchases without their parents' consent. I know this announcement will come as a surprise to many of you since Apple has led the industry by making the App Store a safe place for customers of all ages. From the very beginning, protecting children has been a top priority for the App Store team and everyone at Apple. The store is thoughtfully curated, and we hold app developers to Apple's own high standards of security, privacy, usefulness and decency, among others. The parental controls in iOS are strong, intuitive and customizable, and we've continued to add ways for parents to protect their children. These controls go far beyond the features of other mobile device and OS makers, most of whom don't even review the apps they sell to children. When we introduced in-app purchases in 2009, we proactively offered parents a way to disable the function with a single switch. When in-app purchases were enabled and a password was entered to download an app, the App Store allowed purchases for 15 minutes without requiring a password. The 15-minute window had been there since the launch of the App Store in 2008 and was aimed at making the App Store easy to use, but some younger customers discovered that it also allowed them to make in-app purchases without a parent's approval. We heard from some customers with children that it was too easy to make in-app purchases, so we moved quickly to make improvements. We even created additional steps in the purchasing process, because these steps are so helpful to parents. Last year, we set out to refund any in-app purchase which may have been made without a parent's permission. We wanted to reach every customer who might have been affected, so we sent emails to 28 million App Store customers – anyone who had made an in-app purchase in a game designed for kids. When some emails bounced, we mailed the parents postcards. In all, we received 37,000 claims and we will be reimbursing each one as promised. A federal judge agreed with our actions as a full settlement and we felt we had made things right for everyone. Then, the FTC got involved and we faced the prospect of a second lawsuit over the very same issue. It doesn't feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren't already going to do, so we decided to accept it rather than take on a long and distracting legal fight. The App Store is one of Apple's most important innovations, and it's wildly popular with our customers around the world because they know they can trust Apple. You and your coworkers have helped Apple earn that trust, which we value and respect above all else. Apple is a company full of disruptive ideas and innovative people, who are also committed to upholding the highest moral, legal and ethical standards in everything we do. As I've said before, we believe technology can serve humankind's deepest values and highest aspirations. As Apple continues to grow, there will inevitably be scrutiny and criticism along our journey. We don't shy away from these kinds of questions, because we are confident in the integrity of our company and our coworkers. Thank you for the hard work you do to delight our customers, and for showing them at every turn that Apple is worthy of their trust. Tim The FTC is holding a press conference at this time to discuss the details of the consent decree.
