Amazon on the Hook|for Charging Kids

SEATTLE (CN) - In a victory for the Federal Trade Commission, a federal judge refused to dismiss a suit against Amazon over children's unauthorized mobile app charges.

The FTC sued Amazon in July, claiming the retailer failed to get proper consent from parents for charges children made within software applications, known as "in-app charges."

The FTC seeks refunds for thousands of improperly billed consumers.

District Judge John Coughenour on Monday denied Amazon's motion to dismiss, finding the FTC has a "plausible claim."

Amazon argued that the FTC was asserting a new legal standard by using the term "express informed consent" in the complaint, as opposed to "unauthorized."

"Amazon makes much of this word choice," Coghenour wrote. "Amazon argues that the FTC attempts to 'legislate by litigation,' and asks the Court to be 'sensitive to the statutory context' in which a member of the U.S. House of Representatives once cautioned against an 'overzealous FTC.' Amazon insists that to require express informed consent is 'to hold Amazon to a new and unjustified legal standard.'"

But Coughenour found that the terms are used interchangeably.

"The phrase 'express informed consent' does not represent a new legal standard. The primary - and more appropriate - inquiry is whether the complaint pleads sufficient facts to state a claim under Section 5 of the FTC Act," Coughenour wrote.

He found the complaint alleged substantial injury, that the injury was not reasonably avoidable and that countervailing benefits do not outweigh the injury to consumers.

"The complaint as a whole alleges sufficient facts to depict the nature and extent of practices leading to alleged injury. The practice associated with this injury - billing adults for unauthorized in-app purchases by children - is considered both for the harm and the convenience it provides. The harm is sufficiently addressed by the FTC and the convenience is cursorily explained by Amazon as "enhancing the app's operation,'" according to the 18-page order.

Coughenour refused to issue an injunction, saying it was inappropriate until the case was heard.

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