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FTC Sues Amazon Over In-App Purchases Made By Kids

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STEVE INSKEEP, HOST:

NPR's Business News starts with bills run up on Amazon. The online commerce giant is facing a suit from the Federal Trade Commission. The FTC says Amazon willingly allowed children to make millions of dollars in purchases inside apps, often - we're talking about games here - without parental consent. NPR's Laura Sydell reports.

LAURA SYDELL, BYLINE: A lot of the sales are taking place in games which sell goods like acorns or extra energy.

JEFF CHESTER: These apps are designed to encourage the kids to spend money.

SYDELL: Jeff Chester is executive director of the Center for Digital Democracy, which focuses on privacy issues for kids. He says the apps make it easy for kids to purchase using their parents' Amazon account.

CHESTER: Once the app is tied to the parent's credit card and if the parent isn't looking, the kid can then charge, you know, lots of money.

SYDELL: In one case cited by the FTC, a parent said her daughter required more $350 in virtual goods without her consent, though, some charges were for as little as 99 cents. According to the FTC's complaint as far back December of 2011, internal Amazon communications said the in-app purchases were clearly causing problems for a large percentage of their customers. Amazon did make updates that required a password for charges over $20 and later updated the apps again. But the FTC says it remained easy for children to make unauthorized charges. In a letter to the agency earlier this month, the company's general counsel wrote that it did employ effective parental controls and it has kept improving them. Laura Sydell, NPR News. Transcript provided by NPR, Copyright NPR.

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