Amazon to refund $70 million in unauthorized in-app charges

The U.S. Federal Trade Commission ruled Tuesday that parents of children who racked up charges through in-app purchases could get some or all of their money back.

The FTC and Amazon agreed to end their battle over the legality of the charges by having Amazon refund the purchases not authorized by the parents.

A federal district court found in April 2016 that Amazon billed consumers for unauthorized in-app charges incurred by children using mobile apps such as online games downloaded through the company’s app store. The court found that Amazon failed to get parents’ consent for in-app charges made by their children.

In that same ruling, the court also denied the FTC’s request for an injunction that would have forbidden Amazon from similar conduct in the future. The FTC appealed the denial of the injunction, and Amazon then cross-appealed the court’s ruling that the company had violated the law. The district court stayed its order requiring Amazon to begin offering refunds to injured consumers while the appeals were pending.

In-app charges made between 2011 and 2016 may be eligible for a refund and the refund process could start soon according to an FTC statement released Tuesday.

“The decision by the FTC and Amazon to end their litigation will allow the refund process to begin shortly,” the statement read.

“This case demonstrates what should be a bedrock principle for all companies — you must get customers’ consent before you charge them,” said Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection.  “Consumers affected by Amazon’s practices can now be compensated for charges they didn’t expect or authorize.”

Details on the refund program, which Amazon will operate, will be announced shortly.

The FTC’s action against Amazon followed similar cases filed against Apple Inc. and Google Inc. related to unauthorized in-app charges incurred by children requiring the companies to fully refund consumers for such charges.