Amazon Fails to Dismiss FTC Claim for Unlawfully Billing Children

05 December 2014 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

The Judge found “that the FTC does not bring this suit under a new legal principle, and that it alleges sufficient facts to create a plausible claim for relief under Section 5 of the FTC [Federal Trade Commission] Act.” On December 1, 2014 US District Judge John Coghenour (Western District of Washington) denied Amazon’s motion to dismiss the FTC suit filed in July 2014 in which the FTC wanted a court order requiring refunds to consumers for the unauthorized charges and permanently banning the company from billing parents and other account holders for in-app charges without their consent.

When the suit was filed the FTC press release included these comments:

Amazon offers many children’s apps in its appstore for download to mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.

Now that the Judge has denied Amazon’s motion to dismiss it is likely Amazon will pay a fine, and sign a consent decree to end this dispute.

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