Apple Rushes to Make FTC-Mandated Changes to App Store

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

App Store 2008

Apple (NASDAQ:AAPL) is required to change how its App Store handles in-app purchases by March 31 in order to comply with the terms of a settlement it reached with the Federal Trade Commission. As noted by the FTC, the changes were agreed upon in order to settle consumer complaints against Apple regarding inadvertent in-app purchases. Consumers were billed for millions of dollars of charges that were incurred by children who made in-app purchases while using various kids’ mobile apps.

The unwanted charges were enabled by Apple’s policy of allowing in-app purchases during a fifteen minute window after a password was initially entered. This allowed children to embark on virtual spending sprees without their parents’ consent. As noted by the FTC, the App Store’s password prompt screen did not make it clear to parents that the entry of the password would enable in-app purchases for up to fifteen minutes.

As a result, the FTC required Apple to make two major changes to the way it bills customers through the App Store. First, as noted by the FTC, “The settlement requires Apple to modify its billing practices to ensure that Apple obtains consumers’ express informed consent prior to billing them for in-app charges.” Second, even if a company gets a consumer’s permission for future charges, “consumers must have the option to withdraw their consent at any time.” According to the terms of the settlement, both of these changes must be implemented by March 31.

However, according to an unnamed insider source cited by ZDNet, Apple may be having some difficulty in meeting the approaching deadline. Per ZDNet’s source, it is taking Apple longer than expected to make the changes required by the FTC.

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business