In-App Purchases By Children Dealt A Major Blow—Courtesy Of Apple

In-app purchases were dealt a sharp blow from Apple on Wednesday (May 26), after it quietly agreed to return $100 million to shoppers who say their children either made purchases accidentally or did so without permission.

The reason that this move has such a strong potential to undermine is that the very point of the in-app purchase is to make it so easy that shoppers may not even realize that they're spending money. And for apps aimed at children—especially games—the idea that they'll spend their parents' money accidentally is, as they say in IT, a feature and not a bug.

That said, Apple was facing a 2-year-old class-action lawsuit and it wasn't looking good for Apple. The agreement said that anyone who is "a United States resident who paid for an in-app purchase of game currency charged to your iTunes account by a minor without your knowledge or permission" is eligible for reimbursement. That reimbursement will be either a $5 iTunes store credit or an amount based on the actual losses, if more.

Specifically, Apple said the credit would be "equal to the total amount of Game Currency that a minor charged to your iTunes account without your knowledge or permission within a single forty-five (45) day period, less any refund you previously received. A cash refund in lieu of an iTunes Store credit is available if (a) you no longer have an active iTunes account, or (b) your claims exceed $30 in total."

This ruling was clearly aimed at minors, who have no legal authority to enter into a contract. This raises a different E-Commerce issue, where any charge made by any minor can be challenged as unenforceable. That risk falls on an e-tailer even if the site had no way of knowing that the customer was a minor. This is one of the legal burdens E-Commerce has that in-store has to a much lesser extent. When someone who clearly looks underage walks into a store with a credit card, the associates can ask questions and refuse the purchase. (OK, most won't, but that's another story.)

But this case raises an even more trouble concern. What if the shopper is an adult? But what if the shopper has no intent to make a purchase and thought it was just a part of the app, to hear an additional song or to get a power upgrade. If a shopper can argue that they had no intent nor desire to make a purchase, are they legally entitled to a refund? That truly strikes at the heart of the in-store app.

For more:
- See Pymnts.com story
- See 9to5Mac story

Related stories:

Angry Nerds: The iTunes Youth Legal Nightmare 
Is It Technologically Practical To Send Two Different Messages Simultaneously To Children And Adults? 
New Child Protection Rules Create A Retail Catch-22

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