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'Disappointed' Amazon fights FTC over mobile in-app buys

Published on Jul 3, 2014 4:31 AM

SAN FRANCISCO (Reuters) - Amazon.com Inc is fighting U.S. regulators' demands that it pay a penalty over its policies on purchases made by children on smartphone applications, according to documents seen by Reuters.

Amazon, the largest U.S. on-line retailer, faces a potential lawsuit from the Federal Trade Commission, which wants the company to enter into a settlement similar to the one reached with rival Apple Inc in January.

At issue are in-app purchases, in which apps that are downloaded for free onto a smartphone or tablet then charge users for additional services through registered credit cards. Consumers say that children are susceptible to the practice, leading to large bills.

In a draft complaint, the FTC said there have been thousands of complaints related to millions of dollars in unauthorised in-app charges by children on Amazon devices. The agency said Amazon only changed its in-app charging policies last month.

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