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Apple Faces Class-Action Suit For In-App Purchases 283

Posted by Soulskill
from the deposit-three-slashbucks-to-continue-reading dept.
suraj.sun writes with this excerpt from Ars Technica: "Garen Meguerian and a team of lawyers are taking Apple to task for 'inducing' children to spend hundreds of dollars of their parents' money on in-app game purchases. Meguerian filed a class-action lawsuit this week in California, acknowledging that Apple has already addressed the problem, but saying that the company continues to unfairly profit from sales of virtual 'smurfberries' and 'fish bucks.' The issue at hand is related to games that rely on a 'freemium' business model, giving away the game for free on the App Store and relying on in-app purchases of virtual currency, extra levels, or other add-ons as a revenue stream."
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Apple Faces Class-Action Suit For In-App Purchases

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  • Bad parenting (Score:4, Insightful)

    by Anonymous Coward on Friday April 15, 2011 @05:13PM (#35833460)

    So, neglectful parents are suing Apple because they can't be fucked with to watch what their children are doing?

    How about this: don't give your kid the iTunes account password?

    • Apple has already released a workaround for this issue:

      iOS Settings/Store/AppleID/Sign Out

      Also, it appears NYC is also helping out with the issue. [apple.com]

    • Re:Bad parenting (Score:5, Insightful)

      by joh (27088) on Friday April 15, 2011 @06:20PM (#35834278)

      So, neglectful parents are suing Apple because they can't be fucked with to watch what their children are doing?

      How about this: don't give your kid the iTunes account password?

      The point is THEY WEREN'T GIVING THEIR KIDS THE PASSWORD. They typed it in for them to "buy" a free app and then the kids bought things from within that app in the 15 minute window you can buy things without having to re-type the password.

      I would VERY much prefer an option to disable that password caching altogether. When I buy something I want the device to require the password each and every time I spend money.

      • by sessamoid (165542)

        So, neglectful parents are suing Apple because they can't be fucked with to watch what their children are doing?

        How about this: don't give your kid the iTunes account password?

        The point is THEY WEREN'T GIVING THEIR KIDS THE PASSWORD. They typed it in for them to "buy" a free app and then the kids bought things from within that app in the 15 minute window you can buy things without having to re-type the password.

        I would VERY much prefer an option to disable that password caching altogether. When I buy something I want the device to require the password each and every time I spend money.

        That's already an option now.

    • Re:Bad parenting (Score:5, Insightful)

      by scot4875 (542869) on Friday April 15, 2011 @06:28PM (#35834390) Homepage

      I've said it before, I'll say it again: this is a children's game. THERE IS NO REASON FOR A CHILDREN'S GAME TO ALLOW ITS PLAYERS TO SPEND $100 ON IN-GAME ITEMS.

      What the fuck is wrong with you "parents are being neglectful" people?

      --Jeremy

      • Unless you actually have kids, your opinion about what is right and wrong involving raising kids means less than nothing. It's a bunch of assumptions glued together with logic that has absolutely no bearing on what it's really like to raise children.

        Don't get me wrong, there's plenty of bad parenting out there -- but knee-jerk reactions saying "BAD PARENTS" is so naive it's almost not worth the trouble to respond to.

    • There are huge numbers of problems with the singularly minded idea that there is only one person at fault here.

      1) On a moral level, as the old saying goes, if you aren't part of the solution, you are part of the problem.
      2) Technology, even Apple's is complicated. One might be an expert in construction, art, cleaning, accounting, or teaching, but I'll be damned if I continue to see people who can't figure out their super cool iPhones and the apps that go along with it.
      3) Parents aren't perfect. Sometimes a

  • Easy Way Out (Score:2, Insightful)

    by Anonymous Coward

    Garen Meguerian and a team of lawyers are taking Apple to task for 'inducing' children to spend hundreds of dollars of their parents' money on in-app game purchases.

    I guess taking a multinational corp to court is easier than being a responsible parent these days.

    Here's a hint: if they are too young and dumb^H^H^H^Hnaive to be trusted with a toy or device that lets them spend money, a parent who's worth a damn will wait until they're old enough to handle it before giving it to them. A parent who's worth a d

    • Re:Easy Way Out (Score:4, Informative)

      by cptdondo (59460) on Friday April 15, 2011 @05:21PM (#35833570) Journal

      OTOH I've had my kids' phones "virused" with pay-per-month crap... The invitation is sent as a text, and it's the typical "Hey check this out!" and all the kid has to do is reply. Bang! $10/month for ever for a monthly fortune. I don't know what stuff Apple was pulling, but certainly the texts my kids got were deceiving and not clear. And T-Mobile was complicit in allowing these operators to continue, no doubt getting a big slice of the action. I asked my daughter if she ever subscribed intentionally; she didn't even know she had subscribed. And T-Mobile admitted when I bitched about it that the come-on was often deceptive.

      • What if you blocked all incoming X except Whitelisted stuff? Only his 4 friends and say 5 companies can text him?

        • What legitimate reason would a company ever have to text children? And why would you allow more companies than friends?
        • Re:Easy Way Out (Score:4, Interesting)

          by cptdondo (59460) on Friday April 15, 2011 @05:36PM (#35833792) Journal

          This is one of those issues of parenthood.... My daughter sends some 7K per month. Of those, 2 in the last year were bad (resulting in extra charges). That to me is responsible use. (And lest people start yelling at me about her 'excessive' use, we don't have cable TV, she's on the honor roll and carries an A to A+ average in school, blah, blah, blah. She's not a slacker.)

          So imposing draconian limits on her use is not the answer. The fault lies with deceptive and fraudulent marketing tactics. teaching her to be more careful, yes. Punishing, no.

          • by macs4all (973270)

            This is one of those issues of parenthood.... My daughter sends some 7K per month

            I'm curious: Just HOW thick are the callouses on her thumbs?

      • Re: (Score:3, Informative)

        by Drakino (10965)

        I don't know what stuff Apple was pulling

        From Day 1, Apple has had parental controls that can disable the ability to make any App Store purchases on the device. And by default the phone would ask for the iTunes password whenever a new app was downloaded. The problem initially is that in app purchases didn't require a password every time. Apple has since corrected that.

        Outside of that, Apple has done nothing. App developers are the ones putting in the in app purchases and promoting them in a way that chi

        • Re:Easy Way Out (Score:4, Insightful)

          by cptdondo (59460) on Friday April 15, 2011 @05:42PM (#35833880) Journal

          OK, that's different from the crap T-Mobile was pulling....

          My kids' iPods are hooked to their debit (cash) cards. So if they spend money, it's their own - and limited by the amount of cash they have. They spend wisely. (Amazing how frugal kids get when they're spending their own money.)

          • Right, shouldn't all parents do this? It will just give errors "you're out of funds this month until you reload".

        • Re:Easy Way Out (Score:4, Insightful)

          by AK Marc (707885) on Friday April 15, 2011 @08:57PM (#35835908)

          From Day 1, Apple has had parental controls that can disable the ability to make any App Store purchases on the device. And by default the phone would ask for the iTunes password whenever a new app was downloaded.

          Well yes, you can completely disable app store purchases. However, they do not now, and never have considered $0 purchases any differently than $1000 purchases. Why not a graduated scale? Or allow $0 purchases without a password (after all, who cares about a $0 purchase?).

          And the default of is not to ask for the password for every app purchase. They only ask once every 15 minutes. So you could get one app and not have to reauthenticate again if you immediately got another.

          The problem initially is that in app purchases didn't require a password every time.

          App purchases didn't "require" a password ever, as long as you had performed any authenticated iTunes login and purchase in the last 15 minutes. So if you don't let your children have the password, and you find a free game, like the Smurf one, download it and hand the phone to them, they have 15 minutes of in-app purchases without authentication. There was no way at all to turn off that functionality. What I'd do was to get the app then put it in airplane mode, start a countdown, and hand over the phone. No calls for 15 minutes, but no charges. When the alarm went off, I could take it out of airplane mode. From what I can tell, that's the easiest way to enforce on in-app purchases.

          Apple has since corrected that.

          They released a new OS that everyone would have to upgrade to. Because of their choice to never patch an OS, but instead to release new ones, this means that anyone with a 2G or 3G iPhone can never get the "fix." We have two iPhones, and they are the ones that can never get that OS. So it isn't fixed. I don't know the distribution of sales, but I'd guess that the number of iPhones sold which can't be "fixed" exceeds the number that can. And that's apparently ok with you.

          Outside of that, Apple has done nothing.

          They created a security model that considers the download of a $0 app to require the same security as $1000 of smurfberries, and that authorizing a single $0 app should authorize and infinite amount of other app and in-app purchases. That's a little sloppy. Once it's pointed out and it takes them years to fix it (spending most of that time doing what I see here and blaming parents for their inherently broken security) and then the fix doesn't work for many (most?) iPhones, it's no longer sloppy, it's negligent.

          App developers are the ones putting in the in app purchases and promoting them in a way that children were getting to them. There may be some liability since Apple does have a curated app store, but it's going to be hard to prove intent that Apple was in any way doing this intentionally.

          It's easy to prove they did it intentionally. How? It happened. People complained. Years passed... If they didn't do it intentionally, they continued the practice intentionally. The "best" fix is to allow users to disable in-app purchases of any kind. However, Apple doesn't want that because they make 30% of errors. They want people to make errors and then not demand refunds because the users feel silly asking for a refund for something they did and know they did, even if it was unintentional. Apple is profiting from these, and they were negligently slow in addressing the issue (and did so in a way that affected the least possible number of phones). And here you are lining up to blame the parents and exonerate Apple. I just don't see it.

          • Well yes, you can completely disable app store purchases. However, they do not now, and never have considered $0 purchases any differently than $1000 purchases. Why not a graduated scale? Or allow $0 purchases without a password (after all, who cares about a $0 purchase?).

            I think that is more of a last confirmation that anything else. Do you really want to install this app even though it's free.

            Because of their choice to never patch an OS, but instead to release new ones, this means that anyone with a 2G or 3G iPhone can never get the "fix."

            I'm pretty sure that iPhone owners have been able to get patches [wikipedia.org]. With the last major release 4.3, iPhone 3G owners were excluded but considering they went from 2.0-->3.0->4.2 and all minor version in between, they have been getting patches.

            They created a security model that considers the download of a $0 app to require the same security as $1000 of smurfberries, and that authorizing a single $0 app should authorize and infinite amount of other app and in-app purchases.

            What's to stop a child from making a bunch of non $0 purchases after the purchase of your $1000 app? Nothing?

            The "best" fix is to allow users to disable in-app purchases of any kind.

            Since 3.0: iPhone/iPod Touc

  • by Endophage (1685212) on Friday April 15, 2011 @05:16PM (#35833494) Homepage
    ... that parents are buying their children (who clearly aren't yet older enough to understand financial responsibility) expensive pieces of technology so that they don't actually have to parent or spend time with their children. IMO it's becoming far to common place for parents to sit their children in front of a TV or video game so that they don't have to keep them occupied. Who told them parenting wasn't hard work?

    I'm not saying Apple hasn't been somewhat irresponsible for making it so easy to run up bills but a class action lawsuit is a little extreme for something that the parents are equally, if not more responsible for.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Who told them parenting wasn't hard work?

      The government.

      Or, single mothers who want to show off their amazing independence^H selfishness by raising a bunch of bastard children with no father figure around even though it's well known that children who come from two-parent homes are much more likely to graduate from school, get decent jobs, stay out of jail, avoid becoming teen parents, etc. But those single mothers love their kids so much they think this doesn't apply to them. Course a lot of them are usin

    • I'm assuming the kids are playing the game on the parents' iphone. Nothing wrong with keeping the kids occupied on a long car trip. Would you rather they count out-of-state license plates or something equally mind-numbing?

      • You could always do what my parents did when I was a kid.

        Talk with them. Teach them things you think they should know. Discuss your family history. Bring some books along that they can read aloud and *discuss* with you. Ask them stuff. Sing songs - and make a few up while you're at it. Talk about what makes the weather they see outside, or teach them the different kinds of trees/cacti/mountains/etc they see passing by the window. If you have more than one kid, supply a couple of notebooks and pencils, and h

      • by knarf (34928)

        Would you rather they count out-of-state license plates or something equally mind-numbing?

        Yes, of course I would rather have my children come up with something to entertain themselves then to have them spoon-fed with commercial drivel. I remember these car trips from when I was younger. Every power line looked like a cable car or railway line, license plates were interesting as well - but this is Europe so they might be more varied than in the US - and the great blue (and all to often gray) yonder was (and

    • Parenting is hard work. And sometimes you have a choice between having a whiny and crabby kid or giving the kid something to entertain him or her for a few minutes. If you want to argue that whiny and crabby is better because it doesn't involve electronic diversion, be my guest, but you'll have to be pretty darn convincing before I'll buy it.

      So, if I've got a young child, I might download an app to amuse the child for a few minutes. In doing so, I have to enter my password, and the phone is then author

      • by Americano (920576)

        Disable in-app purchases across the board. Then your kid will ask you if they can buy something, and you can evaluate each request on its merits.

        • by joh (27088)

          Disable in-app purchases across the board. Then your kid will ask you if they can buy something, and you can evaluate each request on its merits.

          Parents thought they would be doing exactly this by not giving their kids the passwords, so the kids had to come and ask their parents to type in the password for them. And then had to learn that for 15 minutes the kids could buy things without being presented with a password prompt.

          Having to enable and disable in-app purchases over and over just to avoid to be run over by the 15 minute password caching is the most idiotic thing I've ever heard. What about just DISABLING password caching, so that you have t

    • by ackthpt (218170)

      ... that parents are buying their children (who clearly aren't yet older enough to understand financial responsibility) expensive pieces of technology so that they don't actually have to parent or spend time with their children. IMO it's becoming far to common place for parents to sit their children in front of a TV or video game so that they don't have to keep them occupied. Who told them parenting wasn't hard work?

      Problem is most parents don't have a PhD from Parenting University. Junior or little Miss popped out and Mum and Dad have been on a running treadmill ever since, with scarcely a moment to see into the Crystal Ball of the future, to see what mischief their progeny will be up to next. Parents can use a little help from companies. Particularly where there is a sort of precedent.

      I'm not saying Apple hasn't been somewhat irresponsible for making it so easy to run up bills but a class action lawsuit is a little extreme for something that the parents are equally, if not more responsible for.

      Roll this back about 10 years and it's kids texting an added $5,000 to their parents mobile phone.

    • by macs4all (973270)

      I'm not saying Apple hasn't been somewhat irresponsible for making it so easy to run up bills

      I am.

      Apple put a system-wide configuration option in iOS even BEFORE all this. It is up to the adult to use normal diligence when handing a device linked to their credit card info to their children and simply walking away.

      I also believe that it is/was incumbent on the APP DEVELOPERS to limit the number of "smurfberries', or whatever, purchased during a particular time-period.

      But, I guess everything is ultimately Apple's fault here in Slashdot-land.

  • by Derekloffin (741455) on Friday April 15, 2011 @05:18PM (#35833526)
    I can't really say Apple is doing anything wrong here. They have not only the option to disable said purchases available, they also went the extra step of modifying their password handling. Seems just like another case of stupid parenting to me.
    • by LWATCDR (28044)

      The business model is far from stupid. It is in fact brillant. It is the exact same model as Magic the Gathering used and many other games and products. It is in fact the old give away the razor and sell the blades model, or the cheap printer and expensive ink model. It makes lots of money and provides a reoccurring revenue stream. As business models go it is great and very successful.
      As a consumer I have no interest in a video game where I winning will come down to how much I am willing to spend. But that

      • by eh2o (471262)

        The dynamics of in-app purchases change the basic nature of game play, that much is certain. I think those dynamics present a conflict of interest or at least a moral dilemma of some sort. For example developers are motivated to create exceedingly frustrating and/or impossible "scenarios" that can be by-passed with a purchase, where those scenarios don't crop up until the user is sufficiently invested in the game-play to consider making the purchase. Its one thing to sell add ons / extra levels, its anot

    • by ackthpt (218170)

      I can't really say Apple is doing anything wrong here. They have not only the option to disable said purchases available, they also went the extra step of modifying their password handling. Seems just like another case of stupid parenting to me.

      Yes... but have you ever had a child in a public school? A child who is failing? Who do you blame? Parents or school?

      There is a logic here, but it escapes me.

    • by xMrFishx (1956084)
      Until the password handling changed it was a bit of an issue. Having a "live" password for 15 minutes was like holding a ticking grenade. i.e. once you'd entered your password to download the free game (fine) it was also valid for in app purchases until the cooldown wore off. That I think was the major source of this issue, as you've said, now fixed (I think?).
      • by joh (27088)

        Until the password handling changed it was a bit of an issue. Having a "live" password for 15 minutes was like holding a ticking grenade. i.e. once you'd entered your password to download the free game (fine) it was also valid for in app purchases until the cooldown wore off. That I think was the major source of this issue, as you've said, now fixed (I think?).

        Apple just did a PR stunt with the changes they did. Now you have two independent 15 minute windows, one for app purchases and one for in-app purchases. So you can still keep the password for yourself, type in the password for your kid to buy a game for a buck, give the iPod/iPhone/iPad back to your kid and the brat can continue to spend a fortune by buying a dozen more expensive games without ever seeing a password prompt. Same with in-app purchases: Type the password once for an in-app purchase, allow 15

      • by macs4all (973270)

        Until the password handling changed it was a bit of an issue. Having a "live" password for 15 minutes was like holding a ticking grenade. i.e. once you'd entered your password to download the free game (fine) it was also valid for in app purchases until the cooldown wore off. That I think was the major source of this issue, as you've said, now fixed (I think?).

        Kind of like that sudo timeout, eh?

        Usability vs. Security is always a tradeoff. At least Apple fixed the problem when it was brought to their attention.

    • Although I do find this business model stupid ...

      What is stupid about in app purchases? Admittedly I have a technical product rather than a game, Perpenso Calc [perpenso.com], but if works along the freemium model. The free version offers scientific functionality including fractions, complex numbers and metric conversions however advanced features like RPN come in from in app purchases. Also this app is really five calculators in one. Rather than offer separate calculators for scientific, statistics, business, hex and bill tip I allow the latter four to be added via in

  • Lets toss money at this team of lawyers to save our children

    • by ackthpt (218170)

      Lets toss money at this team of lawyers to save our children

      You mean, let's point this team of lawyers at Apple and see if they can draw money out of them and then possibly share the remaining 30% with us.

  • parents (Score:5, Insightful)

    by fermion (181285) on Friday April 15, 2011 @05:27PM (#35833668) Homepage Journal
    I don't normally say this, but one must really ask why the parents need to buy kids these things or why parents need to let kids buy things in games. If a parent is responsible enough to get the money to buy an iToy, then makes a decision to buy an iGame, then makes the decision to provide the kids to the credit cards to buy iJunk, Why is it Apple fault that the parents then get a huge iBill. You don't see McDonald's getting sued because parents take their kids to the store and buy them McPoison. The kids were induced by propaganda just like in the case of Apple.

    It was like the uproar over Beavis and Butthead many years ago. Even though parents were evidently responsible enough to get a tv, pay the electricity and the cable bill, they were not deemed responsible enough to monitor what the kids watched. Therefor MTV got in trouble when Beavis and Butthead tortured animals of set them afire. Evidently the kids would do the same and it was TV, not the parents fault.

    So yes children are impressionable. Parents have to set limits on what kids are and are not able to do. But when parent make an explicitly decision to allow kids access to something, either by driving them there, or ordering a product, or giving access to a credit card, or whatever, it is no longer the companies fault. We saw this when kids were racking up huge phone and texting bills. I don't know what the issue was. If the kid can't use the phone, they don't get one, or have a prepaid.

    • Actually, McDonalds *has* been sued because parents buy their kids McPoison. http://news.bbc.co.uk/2/hi/americas/2502431.stm [bbc.co.uk]

      Thankfully, it ended up getting thrown out, but still...
    • by ackthpt (218170)

      Perhaps is nothing more than whether a service should by default be enabled or not.

      I'm a great one for a loud outburst of swearing every time I get a new computer with Microsoft Office on it, because I have to spend hours going through and turning off all the enabled by default options which I hate (and they are so clever at hiding the on/off buttons for.)

      Where a purchasing ability is enabled by default, I can see that being a problem, particularly when they can't possibly be convincingly daft enough to bel

    • by mosb1000 (710161)

      If the kid can't use the phone, they don't get one, or have a prepaid.

      Or get an unlimited plan.

  • by Animats (122034) on Friday April 15, 2011 @05:30PM (#35833698) Homepage

    From the complaint: "The sale of an App and/or Game Currency is a transaction between Apple and the consumer. There is no privity between the user and the developer of the App...."

    They're so right. Remember how Apple won't approve apps which do transactions that don't go through Apple? This is where that bites Apple. Apple is the seller, and the developers are its suppliers. There's no contractual relationship between the consumer and the developer. ("Privity" refers to the legal concept that if A has a contract with B, and B has a contract with C, A does not have a contract with C.)

    • There's no contractual relationship between the consumer and the developer.

      Yes there is, because with an in-app purchase the consumer is saying they wish to give the app writer money in exchange for something.

      What you are doing is like trying to sue the cash register maker because a kid bought something they shouldn't have.

      • by Animats (122034)

        Yes there is, because with an in-app purchase the consumer is saying they wish to give the app writer money in exchange for something.

        But they're saying it to Apple. As the complaint points out, the app developer never sees the customer's payment data.

        Now, if Apple's system let third parties collect payments directly, there would be a contractual relationship between the end user and the app developer. But Apple doesn't allow that. All the money passes through Apple's hands, and they take a cut. So they get hit with the liability if the transaction is illegal.

  • by infiniphonic (657188) on Friday April 15, 2011 @05:31PM (#35833722) Homepage
    Do people really plug in their credit cards into iTunes and then let there kids just do what they want with a device that has access to that resource? There is no way i would even leave a credit card attached to that kind of account, let alone let a child have unrestricted access that device. I have two iPod touches that my kids play with. At this point they are too young to grasp the concepts of accounts or passwords, but that day is coming. I only do iTunes cards so that there is no way that any financial damage can go beyond the amount i have already pre-paid (usually in the $15 to $25 range). A little common sense goes a long way in this world, but i guess that's asking too much.
  • by ackthpt (218170) on Friday April 15, 2011 @05:31PM (#35833724) Homepage Journal

    Would you like to buy a cookie for your pet?

    o_o

    It's a really good cookie!

    O_o

    With chocolate and stuff!

    O_O

    Your pet will wuv oo!

    @_@

    You bought a cookie!
    It was nummy!
    Your pet wuvs oo!
     
    Buy another?

    @_@

    Yay! Your pet weally, weally wuvs oo!

    [repeat n times]

    Thanks for buying all the cookies for your very happy pet!
    Charging $483.75 to account.

    +_+

    • Would you like to buy a new Macbook?

      o_o

      It's a really good Macbook!

      O_o

      With Thunderbolt and stuff!

      O_O

      Steve Jobs will wuv oo!

      @_@

  • I'm not sure that Apple should itself be held responsible for the slimy practices of third-party developers (except that they do review all apps and should therefore be aware of questionable business practices), but I still think what some of these developers are doing is pretty screwed up. Games specifically designed to get as much money from kids who don't know how much money they're spending are borderline unethical. Their practices are similar to those of companies that sell ringtones designed to appeal

    • by jedidiah (1196) on Friday April 15, 2011 @06:03PM (#35834112) Homepage

      > I'm not sure that Apple should itself be held responsible for the slimy practices of third-party developers

      They are a platform tyrant.

      They have chosen to make themselves responsible.

      Now that there are consequences, they should own up to them.

      Now web games do the same sort of thing. Although it's more difficult to get carried away with it.

      The iTunes approach to in-app purchases is kind of like a slot machine that takes credit cards.

      • by jo_ham (604554)

        Yes, and they changed their policies and password mechanisms in response to this, putting the onus back on the person who owns the credit card.

        Alternatively you can set the account up with no credit card and then whatever the kid spends (if you give him your password) is limited to whatever is in the account from gift card top ups.

  • 1. You cannot buy anything from the App Store without having entered and stored a credit card account with Apple.
    2. IOS has always had the ability to disable App Store purchases, both for apps, and for In-App Purchases.
    3. Children should not be given such things without proper supervision.

    Apple should countersue these stupid people for being such a nuisance.

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