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Apple to pay US$32.5 million to settle complaint over in-app purchases

Source: Xinhua | January 16, 2014, Thursday | Online Edition

US Federal Trade Commission (FTC) said yesterday Apple Inc agreed to pay at least US$32.5 million to customers and change its billing ways to settle a FTC compliant over in-app purchases bought by kids without parental consent.

Under the terms of the settlement, Apple Inc will provide full refunds to consumers, a minimum of US$32.5 million, as the FTC complained the company billed consumers for millions of dollars incurred by children in kids' mobile apps without their parents' consent.

"This settlement is a victory for consumers harmed by Apple's unfair billing," said FTC Chairwoman Edith Ramirez.

"Whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," said Ramirez. "You cannot charge consumers for purchases they did not authorize."

Apple will also change its billing practices no later than March 31 this year to ensure that it has obtained express, informed consent from consumers before charging them for items sold in mobile app store, the FTC said.

The complaint alleged that Apple did not inform account holders that entering their password will open a 15-minute window in which children can incur unlimited charges with no further action from the account holder.

The FTC also said it noted that Apple had received at least tens of thousands of complaints about unauthorized in-app purchases by children.

Apple has not made any public comment so far.

In 2013, customers have spent over US$10 billion on Apple' s app store, including over US$1 billion in December alone, Apple said early January. Developers of those apps have now earned US$15 billion through Apple's app store, it added.

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