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FTC, Amazon Agree to Drop In-App Decision Appeals

The Federal Trade Commission and Amazon have "paved the way," as the FTC put it, for consumers to get refunds for Amazon's billing for children's in-app purchases.

The FTC said Tuesday that could also pave the way to more than $70 million in refunds.

A federal judge ruled in April 2016 that, as the FTC had charged in filing suit in 2014, Amazon billed consumers for in-app charges by kids using mobile apps in online games and elsewhere that had been downloaded via Amazon's app store. Amazon did not get parents' permission for those charges, the FTC said and the court found.

But the court did not grant the FTC an injunction against similar future conduct, so the FTC appealed that portion of the decision, and Amazon appealed the underlying decision.

The FTC said its agreement with Amazon will allow the FTC's refund process to begin.

"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, in a statement. "Consumers affected by Amazon’s practices can now be compensated for charges they didn’t expect or authorize.”

The FTC vote to withdraw its appeal was 2-0—the FTC is allowed to render decisions even without a quorum, which is not the case with the FCC.

Amazon had said in disputing the allegations that, from the outset, its in-app charges were "customer-focused, and lawful, including prominent notice of in-app purchasing, effective parental controls, real-time notice of every in-app purchase, and world-class customer service."

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.