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Posted at 12:17 PM ET, 03/10/2011

Apple changes purchase policy to protect kids on iPad, iPhone games

Apple said Thursday that it changed its policy for how purchases can be made within applications on the iPhone and iPad, an attempt to protect users, particularly children, from accidentally racking up iTunes charges.

The Cupertino company’s move affects users of its most recent operating system and comes amid growing concern by federal and state enforcement agencies that consumers, including children, were not adequately informed or aware that they were incurring charges on iTunes accounts because of a 15-minute period that allowed for purchases without a password.

Apple said its new device software, iOS 4.3, made available Wednesday, will come with a feature that requires a password when purchases are made within an application after it is downloaded.

Parents had complained to the The Post that in the 15-minute period after an app was downloaded, children were buying sometimes hundreds of dollars of purchases on games such as Smurfs’ Village and Tap Zoo — popular iTunes games that are also among the highest-grossing programs for in-app purchases.

“We are proud to have industry-leading parental controls with iOS,” said Trudy Muller, a spokeswoman for Apple. She said users have always been able to use parental control setting and restrictions of in-app purchases to protect their iTunes accounts from accidental charges. “With iOS 4.3, in addition to a password being required to purchase an app on the App Store, a reentry of your password is now required when making an in-app purchase.”

The Washington State Attorney General’s office had sent a letter to Apple last December after receiving complaints from consumers. Federal Trade Commission Chairman Jon Leibowitz told lawmakers he would review the practice. Rep. Ed Markey (D-Mass) and other have called the practice deceitful marketing, and public interest groups question why $99 barrels for “snowflakes” and “Smurfberries” are in a children-focused game, when children may not understand that they are racking up real charges.

“This is a victory for consumers,” said Paula Selis, senior counsel for State Attorney General Rob McKenna. “Our attitude about enforcement is that we are most effective with positive change without litigating, and talk an issue through with a company to affect change.”

After charges are made through a password-protected prompt, Apple allows for users to conduct recurring charges within 15 minutes without having to reenter their password. The changes made this week by Apple protect users who were seeing recurring charges made after the download of an application.

The idea is that if a password is submitted to in-app purchases, the user is aware of the iTunes charges being made. Some users like the ability to quickly make multiple charges without the inconvenience of re-entering a password.

But some consumer protection experts say Apple’s move may not extinguish concerns by regulators and lawmakers. Linda Goldstein, chair of the advertising and marketing division at Manatt, Phelps & Phillips law firm, said the in-app purchases cut across many consumer protection issues: marketing to children and recurring charges to a “non-traditional billing device.”

Mobile phones, she said, have “essentially become the equivalent of credit cards in the hands of children.”

“When that happens and you have on top of that programs that inherently involved recurring charges, it’s a recipe for for high FTC scrutiny,”Goldstein said.

By  |  12:17 PM ET, 03/10/2011

 
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