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Thursday, January 16, 2014, 11:06 am PT (02:06 pm ET)

FTC commissioner says in-app purchase punishment against Apple 'has no foundation'

One member of the Federal Trade Commission believes the regulatory body's decision to slap Apple with a $32.5 million consent decree over accidental in-app purchases was without merit, and stated his case in a public dissenting opinion.

FTC

Source: FTC


In the dissent, which was issued alongside the FTC's own decision, Commissioner Joshua D. Wright echoed Apple chief Tim Cook's own conclusion that the Cupertino, Calif. company had already taken sufficient action — instituting refunds and altering the behavior of in-app purchase prompts — to remedy any hardships caused by children's accidental purchases. The opinion was first spotted by Fortune's Philip Elmer-Dewitt.

"When the problem arose in late 2010, press reports indicate that Apple developed a strategy for addressing the problem in a way that it believed made sense, and it also refunded customers that reported unintended purchases," Wright wrote.

Given Apple's actions, the "commission has no foundation upon which to base a reasonable belief that consumers would be made better off if Apple modified its disclosures to confirm to the parameters of the consent order," he continued, adding that in "the absence of such evidence, enforcement action here is neither warranted nor in consumers' best interest."

Some believe that the commission's order was a political ploy, designed to gain accolades from the electorate at the expense of one of America's most important corporate citizens.

In a company-wide email preempting the FTC's Wednesday announcement of the consent decree, Cook told Apple employees that the order "smacked of double jeopardy" — the company had already settled a class-action lawsuit over the matter with terms that essentially mirrored those of the consent decree. Apple would agree to the FTC's demands, Cook continued, because the decree "does not require us to do anything we weren't already going to do" and it would allow the company to avoid "a long and distracting legal fight."

In both cases, Apple agreed to offer full refunds to any affected families. The FTC's order, however, imposed a minimum penalty of $32.5 million, directing any portion of that amount not used for refunds to be turned over to the commission "for informational remedies regarding In-App Charges by children or consumer redress and any attendant expenses for the administration of any redress fund."