10
Jul
nexusae0_AmazonAppstore-Thumb1

While Apple was eventually forced into settling for $32.5 million in customer reimbursements during a similar investigation launched by the FTC last year, it seems Amazon isn't interested in paying out for unauthorized purchases on its own Appstore, and the FTC isn't taking it lying down.

Today, the de facto consumer protection agency in the US filed a federal lawsuit against Amazon under the wide-reaching FTC Act's section 45, which prohibits "unfair or deceptive acts or practices in or affecting commerce." Yes, that is a law. Proving a cause of action under this statute requires the following:

Acts or practices are unfair under Section 5 of the FTC Act if they cause or are likely to cause substantial injury to consumers that consumers themselves cannot reasonably avoid and that is not outweighed by countervailing benefits to consumers or competition.

Essentially, the FTC Act gives the FTC authority to file a lawsuit against business for engaging in behavior that is injurious to consumers while also difficult for said consumers to avoid. The balancing factors are those of competition and benefits to the consumer. In this particular case, Amazon's defenses on those counterpoints is almost inarguably weak - extra safeguards against unauthorized purchases on the Appstore won't harm competition in any measurable sense, and it's not likely they can be said to outweigh the benefits of a faster purchasing process for consumers.

Why, then, is Amazon taking the FTC to task on an issue Apple and Google have already been targeted for, and sought to address with such safeguards?

Lest we forget, Amazon is the owner of a patent on the "1-Click Purchase." Amazon founder Jeff Bezos has made impulse-buying a company directive at Amazon, allowing consumers to get the things they want as quickly as humanly possible, with as little interaction needed from the consumer as possible. The FTC is saying, essentially, "you can't do that on an app store, because kids could buy things without their parents' permission." The FTC's evidence is allegedly millions of dollars in complaints from parents about Appstore purchases made by children without their consent.

This is likely a battle of principle for Amazon, a company that has made its name on fast, easy, online shopping with cutthroat-competitive pricing and an obsession with instant gratification. They will likely draw heavily on analogies from their own physical goods website, where sign-in is not required if 1-Click purchasing is enabled, even on big-ticket items. The same goes for the Kindle store.

The FTC will probably argue that the Appstore, unlike Kindle or Amazon.com, is especially likely to see engagement from children, who have comparatively little use (or more perceived risk) for a physical goods site or, sadly, books. Buying extra lives in Candy Crush Saga is a credit card blip that may go unnoticed for months, until it adds up, and children are obviously less likely to understand the financial implications of microtransactions when they're used repeatedly over long periods.

Who's going to win? Well, my money's on the FTC - but I seriously doubt Amazon's going to let this go without a fight. The company's principles are directly at odds with the FTC here, and they're probably going to make a stink about it, justified or not.

FTC

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • xHabeasCorpusx

    Its going to be hard for the ftc to prove that anybody used the amazon app store.

    • http://www.androidpolice.com/ David Ruddock

      BAZING

      but really they did and that's sad.

  • Scott Hendry

    seems to me that consumers can "reasonably avoid" these types of problems by parenting instead of expecting a phone to do it for them. #merca

    • Guest

      So you advocate depriving children of technology even though someone unskilled in modern tech is pretty much doomed in this world which becomes more and more dependant on technology?

      • AuroraFlux

        Are you daft? Proper parenting in educating children what an in-app-purchase dialog looks like and how they are NOT allowed to press it without permission is not the same thing as "depriving" them of technology.

        Get real.

        • LeeJS

          Yeah, right. Good luck with that. You don't have 3 or 4 year olds, do you? My kids are only allowed educational games on their Nabis but even those have in app purchases. I've lost count of the number of times they've brought it to me saying it's broken because they can't purchase the extra levels that pop up, despite being told repeatedly to just close the box with the x when it opens.

          • AuroraFlux

            You're not hearing me, as a parent, that is YOUR problem, not anyone else's.

          • LeeJS

            Of course it's my problem. I'm not sure how that's relevant to your suggestion that the answer is to simply just 'tell' a small child not to do something and expect them to do it. Children don't work like that so your proposed solution to my problem is not going to work.

            Not all parents have my technical background so do we just continue to tell them it's their problem and let them suffer or do we enforce rules and regulation on those who would take advantage of them? In any decent society the answer is yes. This is why we have regulatory bodies for all types of business and it's why this problem needs a governmental solution.

          • AuroraFlux

            So your argument for regulation and litigation like this is literally "my kid won't listen to me."

            If that's the case, you need to suck up your pride, and accept responsibility for the fact you are unable to keep your child in check. I mean, seriously? Children "work" the way they're raised; there is a tremendous support for the "nurture" aspect in the current nature v nurture argument in the psychology community, especially when it comes to behaviors.

            I don't have kids of my own, but in a highly unusual and somewhat sad situation, I was responsible for raising a baby girl from birth all the way until she was 14, when her biological parents were able to take her back, and I can assure you, it's not rocket science. (But I know, I know, your kids "aren't like that" and "don't listen to anyone" and "you can't do anything")

            Your children are (statistically speaking) the product of your conditioning. So your child won't listen to you and buys in-app-purchases on your account, so what do you do?

            You take the phone from them. You don't let them play anymore. This is the simplest and most direct solution to the problem, and is timeless and doesn't require technological prowess; smartphone or tinker toy, you either respect the rules of the privilege or the privilege gets revoked. This is technology; it's part of our lives and you either adapt and learn it in the same way the automobile became a part of our lives, or you stay stuck in the past and you suffer.

            Or...You let them throw all the tantrums they want but unless they realize the boundaries of having a mobile game available to them, they don't get to play....like a proper parent.

            Or...you supervise them while they play, in the same way you supervise them while they were playing with any other expensive gadget that could be abused...like a proper parent.

            Or...you give them their own device with apps you've installed yourself and no credit card attached to their account...like a proper parent.

            Or...you use Android's multi-user feature which isolates accounts from each other and gives your child his/her own space...like a proper parent.

            Or...you use a Google account with only gift cards as a payment option and you give your child an allowance...like a proper parent.

            Or...any number of 500 other things that YOU as a parent can do to assert your authority as the decision maker in their lives.

            It is YOUR device. It is YOUR financial information. It is YOUR flesh and blood.

            No one should be "regulating" your children except for you. Regulation like this creates parents who lean on others to keep an eye on their child, and it reinforces the idea that someone else can be responsible for the actions of their children.

            Amazon should fight this, and they should win. The app and its ability to purchase is the responsibility of the person who it is licensed to. When a bank gives me a credit card, it is my job to keep it safe and in my hands. I know what it's worth and I know what it can do if purchases I don't authorize are made on it. I don't need to know how the entire goddamn credit system or banking industry works to be able to know that.

            You can have your round-table talks with all your other parents and agree with eachother for days on end about how "Amazon should do something about it" and how it's so "outrageous that it can even happen", but it doesn't change the facts.

            If you have the goddamn time to give your child access to your smartphone, tablet, or account, you have the goddamn time to either educate, monitor, or enforce restrictions upon your child about the same.

          • LeeJS

            So you know the simple ABCs of raising children? Well done. All rather obvious stuff to anyone who has a college education or had caring parents, but what those people who don't or didn't?

            It says a lot about you that your immediate assumption when I jump to the defense of people who need help is that I'm one of them. Fortunately for the world, there are people who care about those less fortunate than ourselves. My two kids could read before they went to reception classes and are extremely well behaved. I don't have any issues with bringing up my children.

            Your mistake is that you have drawn your conclusions based on the one example of how you did it. You raised a girl, or what we parents like to call 'Child Lite'. Try raising a testosterone filled boy or a child with learning difficulties, or mental illness.

            Your theory is not a one size fits all. It's easy to raise a single girl. Try raising a boy. Try two boys and a girl. Try a child with Down's. Those people need help, not your patronisingly arrogant assumptions based on your one girl. If you honestly think all children are the same then you're a bigger fool than you make yourself sound.

            Now think about how easy it would be without an education. In a civilised society we don't just leave those people to struggle and raise yet another generation of similarly afflicted. We help them. We put controls in place to see that they're not taken advantage of or struggling.

            I pay my taxes so that I can live in a society that helps those people. I wouldn't want to live in a country that didn't.

          • AuroraFlux

            So, let's be clear before I start this reply; you are getting heavily emotionally vested in this conversation and you've taken it well BEYOND the scope of Amazon somehow being responsible for in-app-purchases made in its store. I hope you find your way back to the original topic soon.

            Firstly, as my masters was in Psychology with an emphasis on child development, let me stop you right here; my "patronizing assumptions" are not based on my experience raising a child. There are academic institutions with the ability to observe and document the behaviors of a FAR larger diversity of children than you and I will EVER get the chance to see. I'm not speaking on anecdote.

            "Try raising a testosterone filled boy...". There is very little scientifically repeatable evidence in favor of the idea that testosterone causes "aggression" in males or females. That is common-sense science, not real science. In fact, aside from the average height differences between boys and girls, their differences in development on average are largely insignificant. I know that's not what you want to hear, but that is the actual truth. I strongly recommend you read "Pink Brain, Blue Brain", by Lise Eliot; it contains dozens and dozens of scientifically conducted observations and experiments that go against the grain of the typical gender stereotypes that parents often tend to have about their kids. http://www.liseeliot.com/pink-brain-blue-brain And no, she's not some shady book writer; she's a tenured professor of neuroscience at RFU in Chicago. Seriously, it's not terribly difficult to digest, but what you read will surprise you.

            Now that that's out of the way, it is astonishing that you have the gall to call *me* arrogant after you sit there and tell me that raising the child I raised was "easy mode" because it was a girl. You know nothing about where she came from, the troubles she went through, and the pain I had to go through. Obviously, she was not my biological child; you think that was easy for her to deal with? You think she accepted me as a "father" and just decided "Okay, I'm going to switch to 'Lite' mode for you now since I'm a girl". As this Disqus username is not linked to any real life name, I feel fine in telling you that we dealt with her running away 3 times, medically diagnosed depression, an instance of substance abuse, and one horrifically unforgettable night in a county jail (with all charges thankfully dropped). I can assure you she was not an "Easy Mode" child.

            Make no fucking mistake about it, never said it was "easy", I said it was not rocket science to do things the right way. I was entrusted to take care of this child. I did not pass off the responsibility for her actions to anyone else, and I did not expect anyone else to keep her in check. That was my job. It was my decision to raise her. And when I said "it was not rocket science", I mean that if I had to raise the child again, there are still many things I could do that don't involve anything I studied during my academic career.

            Case in point; let's FINALLY return back to the initial point of importance in this conversation; this is an extremely, brutally, categorically simple situation; your child used a device with your financial information to make unauthorized purchases. If you want to prevent that, you have options, the most obvious of which is to remove the device from possession or access of the child. You don't need to know a single thing about how computers work to know that when your kid had your iPad, he made a purchase, and if he doesn't have the iPad, he can't make a purchase. One could easily argue that if your kid is not ready to understand the idea of respect for property (including digital credit cards), they are not ready to use such a powerful device that has access to one. You know who controls that? You.

            Two boys and a girl doesn't change the fact that you control that.

            Down Syndrome doesn't change the fact that you control that.

            Any number of disorders do not change the fact that it was you who gave them access to a device that consequently has access to your payment information.

            Educative measures are ALWAYS statistically significantly better than punitive or restrictive measures. This doesn't just apply to raising the children but the parents themselves; educating the adults on what their devices can do if in the wrong hands is far more effective.

            "Your theory is not a one size fits all. "

            And yet somehow, as is yours; 'Think about all the parents who can't do it.' You keep giving me all these dramatic and wistful examples about all these kids that you think the majority of the world consists of, and you simply refuse to accept the core point of all of this:

            Your device. Your account. Your financial details. Your responsibility.

            I refuse to believe there are justified everyday situations with your children where the above does not hold true. And since your posts now consist of insults and demeaning statements thrown at me, I've got no interest in continuing this subject.

            Good day.

        • J. Martin

          You m'am, are an idiot. Or just young.

          • AuroraFlux

            Firstly, I am not female (not that it really matters) nor am I remotely "young". Let's be very clear about something, it was your choice to bring human beings into this world. If you didn't think you were capable of instilling your set of values and beliefs on them, you should not have had kids.

            Simply saying "Well, haha, kids will be kids" is a copout. Parents these days are so insistent on everyone else doing the parenting for them, whether that "everyone else" is an iPad, a TV, a social network, a ratings board, the government, a corporation, you name it; many (not all) parents these days seem to be unable to resist the temptation to allow someone else have do it for them.

            Sad.

          • J. Martin

            Watch this.

            Hey Internet, I am a lawyer, and I invented cookies. Now listen to my whinging!

          • AuroraFlux

            Er...okay?

            I guess if you actually had some sort of intelligent counter point to make, you would have already made it.

            No worries, feel free to jabber on, free country and all that :)

        • Ash

          I've told my kid not to spin in my chair maybe 30+ times now. I've grounded her for it, yelled, given stern warnings, etc. and damned if she isn't back to spinning in it the next day.

          "Proper parenting" is a lazy argument that has no meaning in the real world. You can be a proper parent, teach proper lessons, but kids are kids. They do dumb shit constantly.

          In this instance, sure, I'd make sure the Amazon app isn't on any phone my kid uses. But not every parent is capable of understanding that one specific app above any others. Mistakes happen. There's no excuse for not including some secondary level of protection against mistaken purchases.

          • LeeJS

            Absolutely. Anyone who can't understand this, or doesn't agree, clearly doesn't have experience with children. And that's probably just as well because they would make terrible parents.

            The world is full of safety valves that stop people doing stupid shit. This is not a bad thing. It's what a decent society does; it protects its most vulnerable from harm.

          • AuroraFlux

            Yes, kids do dumb shit, but you are legally responsible for said dumb shit until they are 18.

            You call "proper parenting" a lazy argument yet you literally just executed proper parenting; you realize that engaging in in-app-purchases is not something you want your child doing, so you made the decision to ensure that the Amazon app store was not used by your child.

            You asserted your authority in deciding what your child is exposed to, and that, regardless of how disgusted you may be with the term, is quite literally the definition of "proper parenting".

          • J. Martin

            My point was that you do not have children or are one yourself. Your view is one held almost exclusively by the childless. Saying "but muhuh I gots da babies too!" in an internet conversation is ridiculous.

          • AuroraFlux

            Oh look! It speaks! And this time, it's not just insults, it's an attempt at an actual logical thought process! Well done, now that we're past that, we can actually discuss this.

            The only "ignorant" thing that happened here is you assuming I don't have an experience with child-rearing. If you read my other comments here, I went through hell and back raising a child, and that experience doesn't change my thoughts; as a parent, you are responsible for the actions of your child. Period.

            There are those of us who raise kids and can understand this concept, and there are those of us who raise kids and out of frustration, temptation, heartbreak, or just sheer exhaustion, they choose to project it onto other entities to handle their kids.

            Your problem is that you are taking this incredibly personally. I have yet to hear one sound argument against the following statement:

            "It is your device, it is your account, it is your financial information. You are responsible for it and you alone."

            What I have heard is countless amounts of abuse hurled at me, both personal and otherwise, people telling me "you obviously don't have kids", and people telling me stories about how they can't get their kid to stop spinning in a chair no matter what they do, and people telling me about how "kids always do dumb shit" and they generally don't listen.

            You know what's missing from all that? Responsibility. Simple. Binary. Fact.

            If your kid uses your iPad to make purchases after you tell him not to, you remove the iPad from his possession so you don't get stuck with the charges that said kid makes, and whether you choose to give it back, and how you give it back to them (conditions, supervision, whatever), is entirely on you. Why is it on you?

            Because you are a goddamn parent. You either run their life until they're capable of doing that job themselves, or they will run yours. That's a simple fact of any parental relationship, human or otherwise.

            If that was the best you had for a logical argument, I guess I'm finished discussing it with you too.

          • J. Martin

            Is this what baby crazy means?

          • AuroraFlux

            Nevermind, it lost the ability to speak, and it's back to insults.

            Oh well.

      • Scott Hendry

        what part of my comment suggests I'd like to deprive children of anything?

    • Randy Strye

      +1 for comment, -2 for "merica" hashtag. that's getting real old.

      • Darrien Glasser

        It isn't even #merica it's #merca.

        -3 for lack of proofing drafts.

        • http://www.androidpolice.com/author/pamela-hill/ Pamela Hill

          I thought it was #murica

      • Scott Hendry

        fair enough. i was trying to get across that people are really lazy by being really lazy myself and beating that dead hashtag once more.

        • Randy Strye

          I'll do you one better by beating a dead horse with this beating a dead horse gif :)

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  • cy_n_ic

    Kinda suprised amazons terms of service do not include a non responsibility clause for unauthorized one click purchases. Or somthing along those lines. Idk. Im not even a simple caveman lawyer...

    • Randy Strye

      Single Female Lawyer
      Fighting for her clients
      Wearing sexy mini-skirts
      And being self-reliant

    • Ash

      It wouldn't matter. No contract supersedes federal law.

  • Danilo Viana

    I myself promote good parenting and that parents often rely too much on the external world to educate their children for them -- but in this case in particular we are talking about the possibility of families contracting a very big debt versus the hasle of people having to touch extra buttons on their smartphone.

    I just don't see how Amazon can win this. Is this "1-click" policy really worth the possibility of hurting families by making them unwillingly contract debts they can't pay?

    Besides, even if you do good parenting usually for you to see the need to educate your children about the in and odds of in-app purchases there needs to be at least one transgression and even that single transgression can cost a lot.

    • http://www.scottcolbert.com/ ScottColbert

      The Amazon app store in most cases has to be downloaded (though I'm sure it may come come preinstalled somewhere). Whoever does really needs to accept responsibility for what happens on their phone/tablet.

      Smartphones/tablets are not necessities, they're luxuries, and people need to either restrict access to them, or use common sense.

      • Danilo Viana

        On this day and age you want your children handling technology, you want them to learn to use smarphones and computers because this is the future. However you want to provide a safe environment for them to use technology. How are you supossed to provide that safe environment if you don't have full control of your device? I want to give my smartphone to my kids but have password in place for any sensitive information, and I can't have that with Amazon App Store.

        • Johnathan McCay

          "This is the future". Then... What happened to the present?

      • lljktechnogeek

        These days, smartphones are "luxuries" in the same way that a linen shirt was a luxury back in Adam Smith's era.

  • Matthew Fry

    Not to mention cutthroat warehouse policies. i.e. metaphorically cutting employees throats via heat stroke. Know what I'm saying? http://www.mcall.com/news/local/amazon/mc-allentown-amazon-complaints-20110917,0,6503103.story

  • http://www.about.me/kendallseabury Kendall Seabury

    Oh look, parents still not keeping track of their damn kids....

  • J. Martin

    Amazon is immune to laws. They sell prescription drugs there. Anabolic steroids. They've been called the most predatory company in the world by our own attorney general.

    Jeff Bezos is next in line to be crowned King of All Douchekind as soon as Larry Ellison chokes to death on his own ego.

  • http://www.thinkingbrian.com/ ThinkingBrian

    Not putting blame on Amazon, Google or Apple, but may be its time for Amazon to create the "2 Click Purchase" which includes a 4 digital pin to be used everytime you buy something. Then we can blame the parents fully for using a credit card with no limits on an account that they are giving kids access to instead of using maybe a gift card or prepaid card with a real limit.

    • My1

      did you even check the settings? they DO have a child protection where you set a pin code or use your amazon password.... screenshot later

  • Paul

    The Amazon App Store already has settings to either totally disable in-app purchases or to enable Parental Controls so you always have to enter your password or a pin for purchases. At least it does within the EU. It's not really Amazons fault if parents aren't turning these settings on.

  • AuroraFlux

    Wow, this is ridiculous. I just looked up "parental controls Amazon App Store". You know what? Since the days of Gingerbread, the Amazon app store has allowed you either restrict in-app/app purchasing with a password or pin, or completely disable in-app-purchase access altogether.

    http://www.amazon.com/gp/help/customer/display.html?nodeId=201357730

    http://www.amazon.com/gp/help/customer/display.html?nodeId=201357720

    Which renders all of this entirely pointless. I am completely in favor of the parent taking responsibility for the access given to the child, and right here, staring right at you, is the option to do that.

    What leg do you have to stand on to say Amazon is in the wrong here? That it's not enabled by default? So millions of users have a poor first-time IAP or app purchase experience because Amazon assumed all of their users were 3 years old?

    • DrakeTungsten

      Thank you. You sir, win this whole discussion! Wow, the FTC is apparently being dumb. Not that I should be surprised.

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