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Sharp Disagreement Among FTC Commissioners Extracting $32.5M from Apple

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The Federal Trade Commission proudly announced yesterday that it had caught Apple off guard by slapping the company with a consent decree in which it is forced to reimburse parents for the costs of accidental in-app purchases by their children. But, as it turns out, not all members of the FTC agree that they have done the right thing by extracting $32.5 million from Apple (via Fortune).

You may recall that FTC Chairwoman Edith Ramirez called the Apple-FTC settlement a victory for “consumers harmed by Apple’s unfair billing.” Back in 2011, the iPhone maker was accused by angry parents whose kids racked up huge bills from in-app purchases of letting them spend money without their parents’ consent.

Apple settled the lawsuit with the parents last year.

In a memo sent to employees, Tim Cook highlighted that Apple had already settled this case and contacted affected parents. But as the FTC threatened Apple with another lawsuit, Cook agreed to settle instead of going to court. So Apple agreed to pay $32.5 million to the parents, which is roughly $880 per case.

But Joshua Wright, FTC commissioner and former George Mason professor of law, made public that he doesn’t agree with the punishment, as it has no foundation.

“The test the Commission uses to evaluate whether an unfair act or practice is unfair used to be different,” he writes. “[Those] cases invariably involve conduct where the defendant has intentionally obscured the fact that consumers would be billed. Many of these cases involve unauthorized billing or cramming – the outright fraudulent use of payment information. Other cases involve conduct just shy of complete fraud – the consumer may have agreed to one transaction but the defendant charges the consumer for additional, improperly disclosed items.”

“This is a case involving a miniscule percentage of consumers – the parents of children who made purchases ostensibly without their authorization or knowledge. There is no disagreement that the overwhelming majority of consumers use the very same mechanism to make purchases and that those charges are properly authorized. The injury in this case is limited to an extremely small – and arguably, diminishing – subset of consumers.”

It may be a victory for the FTC, which, in the end, will receive any money that’s not spent.

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  • m Arch Tom’s on Bar N Ass

    DRAFT
    although in EU we understand the disagreement and most of US even support multinationals work as a way to achieve (but not limited to) globalization and even “state equality” among WORKERS all over the globe (however not among directors), this fine or punishment has to be placed and to confirm the consumer market rules over price policies when using appropriate instruments of the state such as magistrates/DOJ performing authority roles and the purchasing potential of an entire market. briefly, when a DOJ (whether in US or EU) evaluates a dispute between a Business (B) and Consumers (C) , the discussion is almost useless for C will always win when fighting against B. (and following this very simple rule : “A B C = LA SI DO” where Business is S I or Es HIGH and Consumers is D O or “Dio = God”.) although difficult to accept for those with no real and authentic university degree such as graduates’ in subjects other than LAW, ECONOMIC STUDIES, ENGINEERING and in particular referring to poor sales attendants and accountants with a even poorer education level, that is the actual background a magistrate refers to and for reasons that are linked to economics values (even global economy is considered) and characteristics of a capitalism system economy). in other words, workers (secure jobs addicted) pay eventually for the pensions of state supported pension schemes and through income taxes, consumer market pays for great part of STATE expenses and including the magistrate/judge salaries. Now, if You were a magistrate, getting paid for the consumer market pays into the treasury of the state and through sales tax for billions/trillions of transactions, would you risk a loss of VAT/SALES TAX state income? business (merchants) keep forgetting sales tax can be abolished whenever the consumer market makes pressure on the government/MPs to do pass a bill to abolish the tax and when real and authentic evidence is brought to the attention of lawmakers, the state authorities are not protecting consumers. take care, marc

  • m Arch Tom’s on Bar N Ass

    although in EU we understand the disagreement and most of US even support multinationals work as a way to achieve (but with no limitation to) globalization and to even “state equality” among WORKERS all over the globe (however not among directors), this fine or punishment has to be placed and to confirm the consumer market rules over price policies when using appropriate instruments of the state such as magistrates/DOJ performing authority roles and using the purchasing potential of an entire market making pressure on businesses/merchants. Briefly, when a DOJ (whether in US or EU) evaluates a dispute between a Business (B) and Consumers (C) , the discussion is almost useless for C will always win when fighting against B .
    Following this very simple rule : “A B C = LA SI DO” , where (B)usiness is S I (or Es HIGH ) and (C)onsumers is D O (or “Dio = God”.) Difficulties in accepting on what ground a magistrate refers to and to rule based on reasons linked to economics values (even global economy is considered) and linked to characteristics of a capitalism system economy, may occur to those with no real and authentic university degree such as graduates’ in subjects other than LAW, ECONOMIC STUDIES, ENGINEERING (in particular we refer to poor sales attendants and accountants with a even poorer education level such as merchants ).
    In the end workers (secure jobs addicted) pay eventually for the pensions of a state supported pension schemes and through income taxes, consumer market pays for great part of STATE expenses and including the magistrate/judge salaries. Now, if You were a magistrate, getting paid for the consumer market pays into the treasury of the state and through sales tax for billions/trillions of transactions, would you risk a loss of VAT/SALES TAX state income? Business (merchants) keep forgetting sales tax can be abolished whenever the consumer market makes pressure on the government/MPs to pass a bill abolishing the tax and when, real and authentic evidence the state authorities are not protecting consumers is brought to the attention of lawmakers.
    Last but not least, these events are also part of “training on the job”/”learn by doing” process and for the communist-like countries such as russians and russia federations citizens (but not limited to the aforementioned countries and including many catholic-background countries also known as countries of merchants or pizza makers), and who make that decision to come to live and work among US in a capitalism system “world”, where the consumer/client is GOD and regardless of what poor sales attendants and accountants (labors/workers) or merchants, may or may not think and want.
    Take care,
    marc

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