The Federal Trade Commission's settlement with Apple is the first punishment handed to a major tech company over the handling of children's apps. It comes amid growing concern that as children clamor to use mobile devices, companies are doing little to protect their privacy or provide parents with the tools to supervise online behavior.
Apple drew the attention of FTC investigators nearly three years ago after a storm of consumer complaints from parents who were surprised by charges on their credit cards when their children used games such as Tap Pet Hotel and Smurf's Village. These parents complained to regulators and joined a separate class-action lawsuit against Apple that claimed the company had approved games in its iTunes store that enticed children to buy virtual coins or "smurfberries" for real money — as much as $500 per item — without making sure the games had safeguards.
The FTC said Apple unfairly deceived consumers by allowing unlimited in-app purchases for a 15-minute period without telling users of the policy. Normally, any charges on Apple's iOS operating system require users to enter a password to prevent accidental or unauthorized purchases.
Some parents reported that their young children had racked up thousands of dollars in charges.
"This settlement is a victory for consumers harmed by Apple's unfair billing and a signal to the business community," said FTC Chairwoman Edith Ramirez. "You cannot charge consumers for charges they did not authorize."
Image: Kid on tablet device, via Shutterstock