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Amazon to refund $70m in IAP after year of legal appeals

Both Amazon and the FTC appealed aspects of a ruling made by the federal court in April 2016

A group of Amazon customers burned by in-app charges incurred by their children will finally get their money back, a year after a court found that the online retailer had failed to secure adequate consent.

According to a statement released by the Federal Trade Commission, which brought the case against Amazon, as much as $70 million in charges from various apps and games may be eligible for refunds. More information on that process will be released soon, but all charges were made between November 2011 and May 2016.

The FTC filed its case in July 2014, at which point it sought a minimum of $50 million in refunds. The federal court ruled against Amazon in April 2016, agreeing with the FTC's assessment that parents were unable to give proper consent for the money spent by their children on what were labelled as "free" apps and games.

In the year since that ruling, Amazon and the FTC have been slowed down by appeals in both directions: the FTC appealed the court's decision to deny an injunction that "would have forbidden Amazon from similar conduct in the future; Amazon appealed the court's assessment that it had violated the law in the first place. To the inevitable relief of the parents involved in this long-running dispute, the federal court has now put an end to the back-and-forth.

"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 authorise."

The FTC also won similar cases against the other big mobile app stores: Apple settled for $32.5 million in January 2014, and Google paid $19 million in September 2014.

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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