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Amazon refuses to comply with FTC complaint over in-app purchases
Amazon refuses to comply with FTC complaint over in-app purchases
July 3, 2014 | By Alex Wawro

Reuters reports that Amazon sent a letter to the FTC on Tuesday warning the regulatory body against filing a legal complaint against Amazon for its in-app purchase billing practices and threatening legal action if the FTC decides to do so.

The legal issues surrounding the business model are an important factor in the game industry, where in-app purchases have become the norm. Game makers have landed in hot water for releasing games that made it too easy for kids to buy virtual items.

Earlier this year, Apple offered $32.5 million in refunds to settle a similar FTC complaint over its IAP regulation and agreed to modify its billing practices to obtain clear consent from users before charging them for any in-app purchases.

According to the letter, FTC and Amazon representatives have met several times in the past few weeks as the FTC conducts an inquiry into the commerce company's in-app billing systems. The FTC's main claim in the draft legal complaint is that Amazon does not do enough to prove it has informed consent for in-app purchases made by children, and does not effectively respond to customer complaints regarding those charges.

Amazon claims that it has been improving its Amazon App Store in response to customer complaints and that its billing practices "already meet or exceed the requirements of the Apple consent order."

"It's an understatement to say that this response is deeply disappointing," wrote Amazon associate general counsel Andrew DeVore in the letter. "The Commission's unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend ourselves in court."

The tussle is brewing just as Amazon is preparing to launch its first Fire smartphone, likely driving an influx of new users to the Amazon App Store -- which is dominated by games.

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