Apple loses $100 mln in-app purchasing lawsuit; axes apps that track cookies

A $100 million lawsuit lost and the axing of apps that are not using Apple's new tracking system for targeted ads. Just another day at Cupertino.

Published Date
27 - Feb - 2013
| Last Updated
27 - Feb - 2013
Apple loses $100 mln in-app purchasing lawsuit; axes apps that tr...

Apple has just been slapped with a verdict that could cost it roughly $100 million, thanks to a rather vague in-app purchase program. The lawsuit, which was filed by five California parents, has finally been settled, with both parties reaching amicable terms.

The basis for the lawsuit is the 'In-App Purchase' program that Apple introduced some time ago. Parents found their iTunes bills becoming increasingly large, as their children would unknowingly make in-app purchases. The most prominent case happens to be with respect to a free game called Smurf’s Village, which encouraged children to buy $99 barrels of Smurfberries, and actually charged their parents’ accounts with $99.

Parents have complained that the In-App Purchase program was not sufficiently highlighted in iTunes Store, and especially in apps that were being distributed as free. What made the matter worse was the lack of any notifications that an In-App Purchase had been made. In the early days, Apple devices would not even ask the user to enter their Apple ID and Password for any purchases as it would just be stored on the device, which was later rectified by putting in place an expiration. However, Apple has also made In-App Purchases stricter by requiring the user to enter a password every time a purchase is made.

The settlement, once implemented, would see Apple shell out anything upwards of a $100 million to some 23 million users across the United States, but it isn’t going to be so easy to snatch that money up. For starters, the payout is limited to US households where the “accidental purchases” must be over $30 and have been made by a child. Once the three clauses are met, Apple will either shell out cash or iTunes Store credit as compensation.

The accidental in-app purchase isn’t the only fiasco Apple has been dealing with. The targeted advertising many of us see on our iOS devices has been another issue at Cupertino. Currently, apps are using cookie-based tracking methods to deliver these ads, but if sources are to be believed, Apple is about to throw down the hammer pretty hard on them. The reason for the same is reportedly the amount of user data being collected by these apps, an amount Apple isn’t comfortable with.

Other speculations by app developers indicate that Apple is axing these apps so that its own tracking system, introduced in iOS 6, is used. The new tracking system utilizes a non-personal, non-personal device identifier that advertising networks will use to give users more control over advertisers' ability to use tracking methods. All apps that deliver ads and found to still be using tracking cookies will be axed from the App Store as per the new guidelines up at Cupertino.

It would seem that Apple is having a hard time lately with all the iOS 6 bugs, lawsuits and what not, but at least the company is making to effort to lock down user privacy as well as it can. This is potentially another lawsuit avoided.

Source: The Guardian, Ars Technica

Swapnil MathurSwapnil Mathur

Digit's resident camera nerd, (un)official product photographer and the Reviews Editor