Wednesday Apple Rumors: Apple Agrees to $32.5M App Settlement With FTC

by Christopher Freeburn | January 15, 2014 1:28 pm

[1]Here are your Apple rumors[2] and AAPL news items for today:

Resolved: The Federal Trade Commission announced it has negotiated a settlement with Apple (AAPL[3]) over unauthorized in-app purchases by minors[4], USA TODAY notes. Under the deal, Apple will refund charges made by minors who made purchases through apps obtained from its App Store without receiving parental permission. The agreement is expected to cost Apple about $32.5 million. Apple has also agreed to adjust app payment systems to ensure that appropriate approvals are obtained from adult account-holders before purchases are finalized. Apple was criticized by parents who discovered hefty charges — sometimes totaling thousands of dollars — made by children who purchased items while playing games on Apple mobile devices, not realizing that the in-game purchases resulted in real-world bills for their parents. The FTC cited the example of a little girl who rang up $2,600 in charges while playing Tap Pet Hotel. Apple reportedly plans to pay refunds on about 37,000 claims resulting from unauthorized in-app purchases.

Expansive: Apple CEO Tim Cook calls the deal to sell iPhones through China Mobile (CHL[5]) a “watershed moment” for the company, the Wall Street Journal notes. Apple began negotiations with China Mobile in 2008, but only secured a deal late last year. Cook said he personally visited China three times over the past 13 months, helping to push talks along. China Mobile will launch the iPhone on Jan. 17. The carrier will sell the iPhone in more than 3,000 locations across China. Cook said that iPhone sales in Greater China had hit record levels during the final quarter of last year, even before the deal takes effect. Analysts have predicted that the China Mobile deal could generate between 10 million and 30 million additional iPhone sales in China in the first year.

Finally: The long-running saga of Brisbane, Australia’s new Apple Store will get a new chapter when it finally opens on Friday[6], AppleInsider notes. The Brisbane store has been in development for more than two years, but has repeatedly encountered construction problems that threatened to scuttle the location. The new store is located in the historic MacArthur Chambers building, built in the 1930’s and used by U.S. General Douglas MacArthur during World War II. A major contractor went bankrupt during the construction and store design had to comply with restrictions on the historic structure. Apple submitted updated plans for the store to Brisbane officials in August.

For more about the company, check out our previous Apple Rumors[7] stories.

Source URL: https://investorplace.com/2014/01/wednesday-apple-rumors-apple-agrees-32-5m-app-settlement-ftc/

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