Apple Inc. (AAPL) Settles With FTC Over In-App Purchases

Apple Inc. (AAPL) Settles With FTC Over In-App Purchases
ElisaRiva / Pixabay

While it’s often said that “kids say the damnedest things,” they can also cost Apple Inc. (NASDAQ:AAPL) millions. Granted, millions for Apple Inc. (NASDAQ:AAPL) is akin to losing change to the couch, but it doesn’t help the company’s image. Today, Apple agreed to settle with the Federal Trade Commission over a loophole that effectively allowed kids to ring up huge bills for in-app purchases of virtual goods and apps for fifteen minutes after their parents had entered their passwords in the App Store.

Apple CEO explains suit

Apple Inc. (NASDAQ:AAPL) CEO Time Cook didn’t appear terribly apologetic but rather chose the route of almost presenting Apple as the victim in the matter.

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“It doesn’t feel right for the FTC to sue over a case that had already been settled,” Cook wrote in a letter to Apple employees. “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.”

Cook also said that Apple has closed the loophole and begun making restitution to the 37,000 people who made claims against the Cupertino-based company. In all, it’s believed that Apple will me refunding around $32 million in unauthorized purchases. No word was given by either Apple or the FTC on whether or not the company would face additional monetary penalties as part of the settlement.

App Store issues

For many, the settlement is just another demonstration of Apple Inc. (NASDAQ:AAPL)’s cutthroat policies especially with regards to the App Store. Android has gained considerable popularity since it was introduced with a fair number of users citing their displeasure with Apple’s tyrannical hold on the App Store and what users are allowed to put on their tablets, iPhones, and iPods.

Of the 37,000 claims, presumably quite a few were false but Apple Inc. (NASDAQ:AAPL) seems willing to pay them out rather than prolonging a fight that amounts to a mere pittance.

According to the settlement the iPhone and iPad maker must make the promised changes to the App Store by no later than March 31, the FTC said.

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