FTC, Amazon to Withdraw Appeals, Paving Way for Consumer Refunds Related to Children’s Unauthorized In-App Charges

More than $70 million in in-app charges may be eligible for refunds

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The Federal Trade Commission and Amazon Inc. have agreed to end appeals related to last year’s court findings that the company billed consumers for unauthorized in-app charges incurred by children, paving the way for affected consumers to seek refunds from the online retailer shortly.

A federal district court found in April 2016 that Amazon billed consumers for unauthorized in-app charges incurred by children using mobile apps such as online games downloaded through the company’s app store. The court found that Amazon failed to get parents’ consent for in-app charges made by their children.

In that same ruling, the court also denied the FTC’s request for an injunction that would have forbidden Amazon from similar conduct in the future. The FTC appealed the denial of the injunction, and Amazon then cross-appealed the court’s ruling that the company had violated the law. The district court stayed its order requiring Amazon to begin offering refunds to injured consumers while the appeals were pending.

The decision by the FTC and Amazon to end their litigation will allow the refund process to begin shortly. More than $70 million in in-app charges made between November 2011 and May 2016 may be eligible for refunds. Details on the refund program, which Amazon will operate, will be announced shortly.

“This case demonstrates what should be a bedrock principle for all companies — you must get customers’ consent before you charge them,” said Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection.  “Consumers affected by Amazon’s practices can now be compensated for charges they didn’t expect or authorize.”

The FTC’s action against Amazon followed similar cases filed against Apple Inc. and Google Inc. related to unauthorized in-app charges incurred by children requiring the companies to fully refund consumers for such charges.

The Commission vote authorizing staff to withdraw the FTC’s appeal related to this case was 2-0.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:
Juliana Gruenwald Henderson
Office of Public Affairs
202-326-2924

STAFF CONTACT:
Jason Adler
FTC’s Midwest Region
312-960-5614