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Amazon Challenges FTC Penalties Over Children's In-App Mobile Purchases

/ Source: Reuters

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Amazon.com 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. The largest U.S. online 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 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. The FTC said there have been thousands of complaints related to millions of dollars in unauthorized in-app charges by children on Amazon devices. The agency said Amazon only changed its in-app charging policies last month. Amazon, which has built a rapidly growing business around its Kindle mobile devices and last month unveiled its own smartphone, said in a letter Tuesday to the FTC it has already met or exceeded the requirements of Apple's terms.

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