Wednesday, October 07, 2015
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Published: Wednesday, 7/23/2014

Big spenders

The Federal Trade Commission is out of patience with Amazon. The agency is suing the online retail giant for failing to install what it calls sufficient protections against online purchases made by children without their parents’ consent.

The lack of passwords to prevent children from gaining easy access to Amazon game apps on the company’s Kindle tablet computer has made parents liable for “many millions of dollars” of charges, the FTC says.

Citing internal company emails, the FTC argues that Amazon ignored vulnerabilities in its system of so-called in-app purchases. The agency says that before a child is even aware of it, hundreds of dollars in spending can accumulate on a parent’s credit card.

Amazon insists that its practices are legal and that the FTC is focusing on a minor problem. The company says it has refunded money to parents who complained.

The FTC suit says many parents have been billed hundreds of dollars for their children’s activities. The FTC wants Amazon to pay millions of dollars in refunds on sales since 2011, when it began marketing heavily to children.

Far from discouraging online innovation, the FTC suit seeks to hold Amazon responsible for its business practices.

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