Amazon (AMZN) to Fight FTC on In App Purchases
Shares of Amazon.com Inc. (AMZN) were trading up +1.04 or +0.31 percent to $333.89 per share in pre-market trading this morning. The company announced yesterday that it would prefer to challenge the Federal Trade Commission or FTC in court, rather than give in to demands by the regulating agency to tighten its policies on children buying Amazon.comâ s mobile applications.
Amazon.com stock closed at $332.85, up +0.46 or +0.14 percent in Wednesdayâ s regular trading session.
Seattle, Washington based Amazon.com Inc. is the worldâ s largest online retailer. The company, founded as Cadabra in 1995 by Jeff Bezos was originally started as an online bookstore, but later diversified into DVDs, CDs, software, video games, clothing, toys, food and jewelry. The company also makes consumer electronics products such as the Kindle e-book reader and the Kindle Fire tablet computer. Amazon.com employs over 117,000 people and earned net income of +$274.0 million on $7.4 billion in revenue in 2013. The controversy with the FTC is over claims that the e-commerce giant failed to get customerâ s consent for the purchase of in-app mobile applications by children, mostly for online games. Gaming in-app purchases include items such as new characters, character outfits and gaming levels and are generally inexpensive. Nevertheless, these purchases can add up. The FTC wants Amazon.com to agree to fines and additional record keeping and disclosure requirements for 20 years, according to some sources. Apple Inc. (AAPL
) struck a similar deal with the FTC in January, agreeing to pay $32.5 million to consumers because the company had insufficient controls preventing children from making in-app purchases without their parentâ s permission. Apple also agreed on disclosure requirements for a period of 20 years. The regulating agency could sue Amazon.com for its failure, however, in a letter dated July 1st, Amazon responded writing, â
Published on Jul 3, 2014
By Jay Hawk