FTC Eyes Apple In-App Purchases By Children

The Federal Trade Commission is reviewing Apples in-app purchase system because of concerns about children buying virtual goods and currency without realizing the actual cost. On Tuesday, FTC Chairman Jon Leibowitz responded to a call for action by the FTC from Rep. Ed Markey (D-Mass.), who raised the issue after seeing a report in the Washington Post about children racking up charges in iOS apps.

We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases, Leibowitz wrote in a letter to Markey obtained by the Washington Post. Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications.

While much of the technology world has been focused on Apples in-app purchase rules and how they affect publishers and content owners who offer subscriptions, the company has also had to deal with questions about protections against inadvertent in-app purchases by children. Apple allows users to buy apps or virtual goods with one password key-in, which allows for unlimited successive purchases for 15 minutes. A few reports have bubbled up of children unknowingly using this loophole to charge hundreds, sometimes thousands of dollars in purchases.

I wrote last week that Apple is reportedly looking at narrowing or closing the 15-minute window. But officially, the company has pointed to its existing parental controls, which allow parents to prevent all in-app purchases. Its unclear what the FTC will do, though you can imagine Apple is in not interested in courting more regulatory scrutiny. With the FTC and Department of Justice already looking at the new subscription rules, this would seem like an easy situation to remedy.

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