Amazon Plans to Fight FTC Over Mobile-App Purchases

Amazon.com Inc. (AMZN) could be sued by U.S. regulators over claims the online retailer failed to get customer consent for mobile-application purchases made by children.

Amazon is prepared to fight a Federal Trade Commission lawsuit if it is filed, the company said in a letter dated yesterday. FTC staff have been authorized to sue the company if it doesn’t agree to certain terms, according to a copy of the letter, which was obtained by Bloomberg News.

“It’s an understatement to say that this response is deeply disappointing,” the company said. “No one is more focused on creating a great experience for customers than Amazon.”

Amazon said that the FTC is seeking similar settlement terms to a January accord with Apple Inc. (AAPL), which the agency accused of allowing children to ring up charges while playing games on mobile devices. Under that deal, Apple had to refund at least $32.5 million to consumers for charges in mobile applications and to change its billing practices to ensure customers consent to purchases.

Amazon said its practices already meet the standard the FTC required in the Apple settlement. The company, based in Seattle, said that it refunded customers for unwanted purchases made by children, according to the letter.

“Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense,” Amazon said.

Amazon declined to comment beyond the letter, which was reported earlier by the Wall Street Journal.

Jay Mayfield, a spokesman for the FTC, declined to comment on the Amazon case and said the agency is focused on enforcing rules governing unauthorized purchases.

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

To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net Joshua Gallu

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