Apple, FTC reach $32.5mln in-app purchase lawsuit settlement

Apple, FTC reach $32.5mln in-app purchase lawsuit settlement

PanARMENIAN.Net - Apple and the U.S. Federal Trade Commission announced on Wednesday, Jan 15, that the two sides have reached a $32.5 million settlement, bringing to an end a lawsuit over the ease with which children could rack up costly bills through in-app purchases on the iOS App Store, AppleInsider reports.

The FTC has agreed to drop its lawsuit against Apple in exchange for the company paying $32.5 million in refunds to consumers who were affected by the in-app purchase issues. Prior to the FTC's announcement a letter sent by Apple Chief Executive Tim Cook to company employees leaked to various media outlets, including CNBC, in which he criticized the FTC's pursuit, saying the case "smacked of double jeopardy."

However, Cook also said that the new consent decree that was proposed by the FTC does not require the company to do anything they weren't already planning in an effort to resolve the lawsuit. As a result, Cook said Apple would accept the proposal to avoid a "long and distracting legal fight."

The FTC first announced in early 2011 that it would investigate iTunes in-app purchases after receiving complaints from consumers. In particular, games geared toward children were scrutinized, as parents found that their kids were making unwanted purchases in various titles for iPhone and iPad.

In one high-profile incident, an 8-year-old racked up more than $6,000 in in-app purchases through iOS games. Apple ended up refunding the money to the parents of that child, who was playing games sucha s Smurfs' Village, Hay Day, My Horse and Campus Life.

For its part, the FTC teased Wednesday morning that it would announce a settlement with a "major technology company." Apple preempted the formal announcement, however, with the leaked e-mail from Cook, AppleInsider says.

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