Amazon.com, Inc (NASDAQ:AMZN) lawsuit, which began in 2014 seems to be settled thanks to a federal judge who has ruled that Amazon must take responsibility of its recklessness. The online retailer will now be required to compensate parents whose children procured in-app without permission. This should be accomplished within a year-long process, a move that many parents in the United States may view as a reprieve. The conclusion took the U.S. District Judge John Coughenour six months of assessment whether or not the retailer was liable.
The Federal Trade Commission (FTC), which pointed out concerns relating to Amazon, says children had easy access to playing games such as “Pet Shop Story” and “Ice Age Village” on mobile devices. This in return accumulated to unauthorized charges estimated to be $86 million. FTC further argues that Amazon failed to take on a more Apple-like policy about in-app purchases
Amazon lawsuit: Method of payback not established yet
In response to the just concluded Amazon lawsuit, a notice-and-claims process is expected to begin early 2017. However, it remains unclear as to what method the retailer will use to settle the claims given that the judge rejected its request to issue refunds in the form of gift cards. Coughenour argues the plan is likely to create room for the company to recapture some of the profits that are at issue. On the other hand, a U.S regulator’s request for a $26.5 million lump-sum payout was also thrown out
But why did the judge take that approach? He says, “It removes the uncertainty of the proper lump sum amount that the parties have vigorously disputed. Moreover, it accomplishes the goals of placing liability on Amazon and refunding eligible customers.”
It is not the first time that FTC is intervening
While neither Amazon nor the FTC was willing to comment on the matter, the Commission has previously settled similar cases against Apple and Google. The settlement ordered Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL) Google to refund at least $32.5 million and $19 million respectively. Nonetheless, the Amazon lawsuit is now a lesson to them because they have all incorporated the use of password and security controls for ultimate control of unauthorized charges. Meanwhile, Amazon stock was trading at 739.01 a decline of $3.370.45%).
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