In what should spell the end of undisclosed app store shopping sprees for minors, Apple is submitting to the Federal Trade Commission’s order to refund in full anyone whose kids made unauthorized charges for in-app purchases.Apple agrees to refund at least $32,500,000 to its account holders, but there is no cap on Apple’s liability to customers who demonstrate that they suffered unauthorized in-app charges. Should consumer refund requests amount to less than the mandated minimum, the remainder of the settlement sum will go to the FTC as “equitable disgorgement.” Apple also agrees to stop enabling unauthorized charges by March 31st of this year.This settlement takes Apple to task for its “fifteen minutes of game” practice, whereby account holders’ passwords remain cached for fifteen minutes after being entered. The feature (or bug) allows for minors to continue making purchases on their parents’ accounts for fifteen minutes after the parents have entered their password.According to the FTC’s complaint, many apps that charge for in-app activities target children. In “free” apps and games such as Dragon Story or Tiny Zoo Friends, achievement is related to how skillful players are at surreptitiously accessing their parents’ finances. One recently swindled App Store reviewer says Apple’s games “‘sucker young children into spending huge amounts of money’ without their parents’ knowledge.”At the heart of debate surrounding the FTC’s censure of Apple’s billing practices is the question of how to frame authorization in the era of micropayment. The lifeblood of the online marketplace is the power of participants to express agreement over the network, and to do so quickly. As obstacles to making agreements become more demanding, transaction costs rise, and commerce suffers.Technologies like the App Store and Bitcoin, meanwhile, favor speed and convenience. For Apple, the fifteen minute authorization window encouraged online shopping, as it saved customers from the time-consuming and annoying need to re-enter their passwords every time they wanted to make a purchase. This was good for Apple, who made more sales, and good for the shopper, who enjoyed a more fluid shopping experience.Problems arise when openness breaks down. Surely, the “incredible developers,” whose apps netted Apple over ten billion dollars in 2013 could have figured out a way to communicate to parents the fact that when they entered their passwords they were granting their kids a fifteen minute in-app shopping spree.In its public comments following the FTC’s censure, Apple declared its commitment to “making the app store a safe place for customers of all ages.” In making the App Store safe for small children, Apple has failed to make it safe for parents, who end up paying for what those tiny shoppers buy. Developers are going to have to figure out a way to increase security to ensure unwanted payments don't run rampant, without stifling the ease of use that has made such platforms so successful in the first place.
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