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Apple and Children: The In-App Purchase Dilemma

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Apple’s “freemium” apps are highly popular because they do not require upfront payments for items. Rather, they are marked as “free” at the App Store and draw you into the games and challenges they present. For Apple customers who want to save cash, or college students who do not want to spend their gas money, freemium apps provide a free form of leisure that you can participate in while keeping your money in your pocket. Freemium apps, however, are not “free” in the strictest sense of the word; although they require no fees upfront, freemium apps require money as the game carries on. I experienced this one year ago after I purchased the iPad 3 with Retina display, the first iPad from Apple I had ever purchased. I started playing Crime City because I was fascinated by the idea that a game could be created about how to be a gangster and survive the streets. At first, all was well; I played the game free of charge. Eventually, however, my gold and dollars started to decline, and I needed some serious cash and gold to continue raiding, robbing, and “killing” people (I do not like the idea of painting myself as a virtual gangster in this regard).

In any case, the downside to freemium apps is an exploit that children are now using to put their parents in financial peril. As early as last month, parents began to report (increasingly) that they were denied purchases in the App Store because of their children’s “clicking” habits during a freemium app game. One parent, Chris Brown, reported that he downloaded the “Smurfs Village” app for his six-year-old son to play. Some time later, he wanted to purchase an app from the App Store and was unable to do so because his son had purchased 160 euro’s worth ($208.13) of in-app accessories from the App Store. This has been the case with many parents. What makes parents even easier targets of innocent purchases is that Apple provides a 15-minute “granted access” window where a child (or user) can download apps without having to reenter his or her password for each app purchased. How many apps can children download in 15 minutes? I shudder to think of the money deducted with each app.

ITunes parents brought a lawsuit against the Apple Corporation in 2011 because of the 15-minute “window of opportunity” that served as a gateway to financial ruin. Some 23 million iTunes account holders will receive a minimum of $5 credit (some as much as $30 or more) as a result of the child downloads. Apple attempted to patch this loophole up, but the loophole still remains, as CNET’s Josh Lowensohn reports:

“Apple changed that behavior as part of a system software update in March 2011, but not before some parents were hit with massive bills. A report from the BBC earlier today noted that it’s still possible to rack up charges, given the case of a 5-year old from southwest England who spent more than $2,500 in purchases on his parents’ iPad without the password, an amount that was reportedly refunded by Apple” (Josh Lowensohn, “Apple’s In-App Purchase Settlement Faces Approval”).

What can we learn from the story of child downloads? First, parents are responsible for their child’s behavior. It is fine that Apple chooses to refund parents for purchases made, but parents have a duty to watch their children and monitor their progress. While iTunes downloads pale in comparison to the number of children who die each year because parents leave their guns within the child’s reach, parents are still responsible — either way.

Next, Apple is not innocent in the matter. Parental neglect is on the parents, but software loopholes are the fault of Cupertino. The company must take care to make its software such that both users and the children of users can handle iTunes without incurring massive financial charges that must be refunded later. Lawsuits are not fun for either the plaintiff or the defendant, and Apple needs to do all it can to stay out of the courtroom. The last time Apple was in the courtroom, it pursued a case against Korean manufacturer Samsung that, in part, has been overturned by about $400 million. Currently, Samsung’s fiscal responsibilities stand at approximately $598 million. The reason? Something about the case went wrong. Apple has spent the last year on the hunt for patents it can claim (filing forty or more in one week), not to mention suing Samsung and being currently under lawsuits by other companies. The last thing Apple needs to do is be the defendant in another lawsuit.

The simple solution to Apple’s problem is this: fix the software. It may seem cute that children are growing intellectually smarter nowadays than they were when I was a child (some 20 years or more ago), but it is not so cute when Apple is forced to pay millions. In the same way Cupertino fixes its security holes against jailbreakers, the company needs to focus on helping parents so that, in 2014, there will be no further talk of an Apple iTunes lawsuit. Let’s learn from this mistake so that we do not find ourselves in this place again.

5 Comments

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  1. Dear Commenter,

    As you said, multiple-user accounts (for parents and children) would be a good thing.

    Unfortunately, Apple’s tight control over iOS will not allow the company to give admin rights to anyone but Apple.

    This is the price the company must pay for its hard control over iOS software. Thanks for commenting.

  2. That is my suggestions for a patch on Apple side as software implementation that can recognize logged in administrators and logged in users.

    That is the temp fix I think will fix the issue.

  3. Is very simple to fix, create a profile in the IPAD.

    One for the administrator: parent

    One for the children: users

    Parent can buy and children can not.

    The end…

  4. I am shocked you only blame Apple and not the companies whose idea of a great “game” is to target to small children, while also including In-App-Purchases of 80 or 150€. This has been the case in Smurf Village, My Little Pony etc.
    In games targeted at adults, it seems like a shady practice, but “buyer beware”. At “games” targeted at the 0-10 year-old range? That’s just plain dirty.
    Obviously Apple should fix the software. However, the game developers and the mother companies behind them should voluntarily limit the prices of in-app purchases and program in a level of sophistication like a two-finger swipe, or a captcha type code, to eliminate completely the chance.

  5. What dilemma? If Apple had a decent parent/child account system, parents would get a complete report of their children’s activity. Just make sub-accounts like so many services in the past have made.

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