The Federal Trade Commission recently levied a $35.2 million fine against Apple, following complaints that the company didn’t do enough to warn parents about the potential problems with some of their apps.
Most notably, when their child was playing a game, a parent would enter a password to let their kid buy something in the game, but were not told that password would remain valid for 15 minutes, allowing the child to make continuous in-game purchases for that entire time. According to one of the complaints filed, a kid playing the game Pet Hotel ran up a bill of $2,600 before those 15 minutes expired.
While the first purchase could very well be a 99-cent packet of treats for a pet in the hotel, easy to allow for a parent, there would be no indication that the password approval would be for more than just the one item, and other items in the hotel cost $50 or $100. The money will go to refund some irate parents’ charges, and Apple also agreed to change its billing practices by March 31 so they must receive express consent before billing their customers for in-app purchases.
Consumer Reports got curious after this fine was levied and decided to check out Apple’s biggest competitor in the app market, Google. Trying to mimic the circumstances that led to the $2,600 bill on Pet Hotel–which is free to download, by the way–they found that the Google Play store did not have a 15-minute window for unlimited purchasing permission. It was 30 minutes. The potential for rampant child spending was still in place, for twice as long. As an Android phone owner and Google Play user, I’m proud that Google has once again shown that they can outdo anything Apple does. The FTC has not said whether there have been complaints against Google, but I’m guessing Android phone owners are savvier than their Apple counterparts, and as such have better behaved kids. Or kids can’t work Android phones as easily.
Or perhaps Google’s users are better parents in another way. Forcing Apple to stop this sneaky practice leaves kids with one less way to learn a valuable lesson at an early age. With the boundless spending possible, Google parents can teach their kids all about capitalism and how corporations will try to sneak every last dollar out of you. Learn early on about the shameless way a company will reap vast profits out of those least able to make good financial decisions and you’ll carry those lessons for life, especially if the parents make the kid pay off the bill. The bigger the bill, the longer they have to pay it off on their meager allowance, and the bigger the impact. Three years without being able to buy a new toy? Those scars don’t heal. This also teaches kids about paying off loans, hopefully preventing another mortgage crisis, and could help keep them from getting themselves into massive credit card debt in college, when so many don’t understand the life-altering bill that eventually comes due after so many attempts at buying momentary happiness.
It could also teach them the ruthlessness needed to succeed at the highest levels of corporate America. Keep capitalism strong, Google!
Meanwhile, the Apple children are learning a different lesson, though maybe no less valuable in its way. They are being taught that if you get into financial trouble, just turn to the government for a bailout. Don’t knock it ’til you’ve tried it.
Then again, there’s a double lesson being learned here about how much to trust that bail-out government action. Before the FTC sought punishment against Apple, the company had already begun paying refunds to parents in this situation. They had contacted everyone who had in-app purchases in children’s games, sending them emails, and then if those bounced, sending postcards. The reimbursement checks had already started going out before the FTC got involved at all. Documents released as part of the agreement make no mention of whether the money already paid out will be subtracted from the $32.5 million the FTC ordered Apple to pay.
That total, and documents don’t show how they arrived at that number–new math is everywhere!–comes out to be $880 per complaint filed with Apple. After refunding all of the money owed to parents of greedy kids, especially if they can’t count the money they’ve already refunded, there could be millions of dollars left over. But all $32.5 million must come out of Apple’s coffers. Where does that extra money go?
The bottom line is you can’t trust the corporations, you can’t trust the government, and you definitely shouldn’t trust your kids with your billing information.
In fact, maybe don’t give your kids a high-powered internet-connected gaming device in the first place. Let them read books or go outside. What they’re likely to run into out on their own is probably less dangerous than what they can meet on the internet.
Even if your child is abducted, the ransom demand will probably be less than they cost you on their iPad.