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Mobile Apps

Apple to refund $32.5 million to parents for kids' App Store purchases

Apple has agreed to refund at least $32.5 million to the parents of children who made unauthorized purchases in the App Store, although the company also said it had already voluntarily begun the repayment process.

The US Federal Trade Commission (FTC) and consumer electronics giant Apple jointly announced the reimbursement plans on Wednesday, to total at least $32.5 million (23.9 million euros).

Apple stood accused of failing to properly inform parents about the authorization process for making purchases within the company's online "App Store." This platform is password protected, but users do not need to re-enter their data during a 15-minute window after their first authorization - provided the follow-up purchases cost $99 or less.

The FTC's chairwoman Edith Ramirez said that parents were sometimes not aware of this, meaning that "children ran up millions of dollars in charges without their parents' knowledge and consent." Ramirez said the repayment plan Apple agreed to set no theoretical upper limit. Should affected parents claim less than the $32.5 million minimum agreed to, the balance would go to the FTC.

"You cannot charge consumers for purchases they did not authorize," Ramirez said. Wednesday's ruling also set a March 31 deadline for Apple to come up with a refined billing and notification system to prevent such confusion.

Many popular games offered on the App Store are free to buy - free downloads also require password authorization - but subsequently offer bonuses and special features that can cost money.

Customers spent in excess of $10 billion dollars for products offered on the App Store in 2013; the online portal reached a global total of 50 billion downloads in May of last year.

Apple CEO Tim Cook said in a memo to staff, obtained and published by specialist website 9to5mac, that the company had already voluntarily begun this reimbursement program before the FTC's intervention.

"The consent decree the FTC proposed does not require us to do anything we weren't already going to do, so we decided to accept it rather than take on a long and distracting legal fight," Cook was quoted as saying. The boss of the world's most highly-valued company, based on market capitalization, said that 37,000 compensation claims had been filed after Apple sent emails - and even snail-mail postcards if the emails bounced - to millions of customers.

The FTC's Ramirez, however, said that Wednesday's agreement "provides more robust relief" for affected consumers than any efforts Apple made voluntarily.

msh/jr (AFP, AP, dpa)

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