FTC Commissioner Defends Apple Following Settlement
On Wednesday, MMi reported that Apple has agreed to settle with the Federal Trade Commission regarding an in-app purchases controversy that involved thousands of consumers who were purportedly dinged with unwanted charges stemming from in-app purchases made by minors using their parents' iDevices.
The FTC is dropping its lawsuit against Apple, which is paying a $32.5 million penalty in the form of refunds to consumers who were financially impacted by these unwanted in-app purchases.
On Thursday, however, news came to light that not everyone at the FTC is upset with Apple. In fact, FTC Commissioner Joshua D. Wright has objections to the controversial lawsuit and settlement.
"The test the Commission uses to evaluate whether an unfair act or practice is unfair used to be different," Wright writes. "[Those] cases invariably involve conduct where the defendant has intentionally obscured the fact that consumers would be billed. Many of these cases involve unauthorized billing or cramming – the outright fraudulent use of payment information. Other cases involve conduct just shy of complete fraud – the consumer may have agreed to one transaction but the defendant charges the consumer for additional, improperly disclosed items."
"This is a case involving a miniscule percentage of consumers – the parents of children who made purchases ostensibly without their authorization or knowledge... The injury in this case is limited to an extremely small – and arguably, diminishing – subset of consumers," he concludes.
On Wednesday, Apple CEO Tim Cook largely made the same argument and articulated why Apple agreed to settle.
"It doesn't feel right for the FTC to sue over a case that had already been settled," Cook explained to Apple employees. "To us, it smacked of double jeopardy. However, 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."