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Apple Settles In-App Purchase Lawsuit, Offers iTunes Credits and Refunds to Parents

NewImageApple has settled a lawsuit brought in 2011 after children ran up hundreds of dollars in spending on in-app purchases in freemium games.

The company will give iTunes credits to parents who claim their minor bought in-app items without permission and the option of cash refunds for claims over $30.

Reports GigaOm:

The proposed settlement comes after parents sued Apple in 2011 upon discovering that their minor children had racked up credit card charges in supposedly free games. The issue was the subject of a Daily Show feature about a father whose kids racked up hundreds of dollars to keep virtual fish alive in a game called “Tap Fish.”

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In order to collect under the settlement, Apple users will have to attest that a minor bought “game currency” and that the user did not provide the minor with the Apple password.

The FTC looked into parental concerns over in-app purchases, but apparently let the lawsuit run its course before acting. The agency has examined other issues with kids using mobile apps, particularly around privacy. Late last year, the agency expanded the Children’s Online Privacy Protection Act to cover mobile games and social media.

Apple will send email notices to the 23 million iTunes account holders who are affected by the settlement. The full settlement document is available on Scribd.

The company began requiring passwords for in-app purchases in iOS 4.3, soon after concerns over unauthorized purchases came to light. In-app purchases can now also be shut off entirely.