Amazon is a popular electronic commerce platform and cloud computing company. It is being legally bound to pay millions of dollars to parents. Since, children these days are into online gaming but fail to understand the concept of online app purchases. Many children indulge in purchases without parental knowledge. The company has been ordered by a Federal judge to payback the parents for the purchases made by their children. The purchases were made without the knowledge of the parents and against permission.
Amazon to start refund from next year
Reuters report that the electronic commerce giant has been ordered by court to set up a notice and claims process for next year. It is to notify eligible parents of the refunds that would be made through gift cards. The issue dates back to 2011 when the company allowed in-app purchases. Amazon takes 30 percent of the profit made through such purchases. There were no password protections for account which led to unwanted purchases and unauthorized in-app purchases made by the children. In 2014 when the matter landed in the Federal Trade Commission it was noticed that around $86 million were made through in-app purchases in the Amazon app store.
It estimated that around 42 percent of the profit was generated from in-app purchases were without parental consent. The FTC had asked for $26.5 million in damages from the company. In April, the court said that Amazon procedures of informing customers about purchases were not sufficient and this week issues a penalty on the company. The court also insisted that Amazon inform the eligible parents and aks them to make individual claims.
Read about what Amazon did with Twitch
Amazon isn’t the first to be in court by FTC over in-app purchases. Apple in 2014 refunded more than $32 million to its customers and the same year Google paid back $19 million of the purchases made by children.
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