Amazon fights FTC over mobile in-app purchases -report

July 2 Wed Jul 2, 2014 1:06pm EDT

July 2 (Reuters) - Amazon.com Inc is fighting U.S. regulators' requests that it tighten policies on in-app purchases, The Wall Street Journal reported on Wednesday, taking a hard line on a controversial issue that rivals like Apple Inc have settled.

Consumers have complained about mobile apps that can be downloaded for free but then encourage users to pay for additional services through registered credit cards, a practice consumers say children are susceptible to and can result in huge bills.

Apple has struck an agreement with the FTC over its own in-app purchase polices.

Amazon said in a letter to the FTC, seen by the Journal, that it was prepared to defend its policies in court rather than submit to fines, or adopt additional record-keeping and disclosure requirements over the next two decades.

Amazon was not immediately available for comment.

"When customers told us their kids had made purchases they didn't want, we refunded those purchases," Andrew DeVore, an Amazon associate general counsel, was cited by the Journal as saying in the letter. He said Amazon's app store included "prominent notice of in-app purchasing, effective parental controls and real-time notice of every in-app purchase."

The FTC is asking Amazon to make those notices more prominent, require passwords for all in-app purchases and make refunds simpler and easier, according to the Journal.

The FTC declined to comment on the Journal report, but said it "is focused on ensuring that companies comply with the fundamental principle that consumers should not be made to pay for something they did not authorize."

"Consumers using mobile devices have the same long-established and fundamental consumer protections as they would anywhere else," the FTC said.

Apple had agreed to refund customers at least $32.5 million and change its billing practices to ensure it obtains consent from parents before charging for in-app spending. Purchases of digital goods -- from extra game lives to special in-game tools -- are key to the success of tech companies' app stores, which in turn drive usage and mobile device sales. (Reporting by Diane Bartz in Washington, D.C., and San Francisco Newsroom; Editing by Leslie Adler)