FTC & Amazon Drop Legal Fight Preventing $70M Of Refunds

The United States Federal Trade Commission (FTC) and Amazon have dropped appeals against an earlier court ruling, leading to a possibility of up to $70 million in refunds for consumers. The case in question relates to in-app charges, or more specifically, those relating to unauthorized in-app purchases made by children. The news means that affected customers should soon be able to secure refunds from the Seattle-based eCommerce giant.

It was in April last year that a federal district court came to the conclusion that Amazon was liable for billing some customers for unauthorized in-app purchases due to failure to obtain parental consent for certain in-app charges. Judge John C. Coughenour of the United States District Court for the Western District of Washington found that the online retailer had failed to obtain parental consent for some charges incurred by their children with regard to the use of mobile apps from Amazon’s app store and that those parents should not have to pay incurred expenses. At the same time, the FTC was denied an injunction preventing Amazon from using similar processes in the future. That denial was appealed by the FTC, with Amazon then cross-appealing against the law violation ruling. At that point, the court stayed the order requiring Amazon to start giving refunds to affected customers while the appeals were still pending. The FTC has now officially announced the end of any appeals concerning the matter and stated that eligible refunds of in-app charges incurred between November 2011 and May 2016 could amount to over $70 million.

The decision to cease litigation will enable Amazon’s refund process to start soon, and further details on the matter will follow shortly. The acting director of the FTC’s Bureau of Consumer Protection, Thomas B. Pahl, spoke about affected consumers being compensated for unexpected or unauthorized charges. He said the case described above should set a seminal example for all other companies looking to charge their customers prior to obtaining their consent for any purchases. This is not the first time that the FTC has taken action against companies in connection with children’s unauthorized in-app charges. Both Google and Apple have previously been ordered to offer full refunds to consumers affected in the same way, with more than $50 million being refunded as a result.

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