In a news which would effect the Amazon stock, Amazon.com, Inc (NASDAQ AMZN) is facing a potential lawsuit from the FTC similar to the one it brought against Apple to tighten its rules on in-app purchases. Unlike Apple, Amazon.com, Inc. (NASDAQ:AMZN) is pushing back at the FTC saying that it is ready to “defend approach in court,” rather than paying out a settlement.
In January, Apple Inc. (NASDAQ:AAPL) settled with the FTC for $32.5 after the commission levied charges against Apple alleging that the company hadn’t done enough to prevent from purchasing virtual goods without parental consent. As the App Store stores credit card numbers, it was easy for children to make unauthorized purchases. The money that Apple paid was distributed to the parents who complained about their children’s in-app purchases.
In-app purchases include extra turns, additional game levels, new game characters and other items that players can purchase for amounts that generally range from $1 to $5 dollars but can cost quite a bit more for rarer items. Programs like Viber also allow for paid stickers and other items to customize their experience, app store owners as a rule hold on to about 30% of the revenues from these purchases and can be quite lucrative.
Amazon.com, Inc (NASDAQ AMZN): Statements of Amazon and FTC
“The commission is focused on ensuring that companies comply with the fundamental principle that consumers should not be made to pay for something they did not authorize,” an FTC spokesman said. “Consumers using mobile devices have the same long-established and fundamental consumer protections as they would anywhere else.”
“When customers told us their kids had made purchases they didn’t want, we refunded those purchases,” said Andrew DeVore, an Amazon associate general counsel, in the letter to the FTC. He said Amazon’s app store included “prominent notice of in-app purchasing, effective parental controls and real-time notice of every in-app purchase.”
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Amazon.com, Inc (NASDAQ AMZN) Business News
It would be interesting to see how Amazon (NASDAQ AMZN) responds to the FTC lawsuit. While both sides have made their points of view clear, the result of the lawsuit along with its implications would determine the stock’s performance. Amazon stock has performed reasonably, with the company looking to make in roads into new markets.
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