Who’s better suited to design an app store? Google, or the Federal Trade Commission (FTC)? The answer seems obvious, but recent enforcement actions by the FTC suggest otherwise. Google recently agreed to pay $19 million to settle FTC charges that the company had made it too easy for children to make unauthorized purchases in the Android app store. Apple settled a similar case earlier this year, and Amazon has also come under fire for its in-app purchasing design (Amazon refused to settle and its case is being litigated in federal court).
Despite ample parental controls and password protections, there will always be a handful of compelling anecdotes of children who run up obscene tabs on their parents’ appstore accounts. And, generally every time, tech companies are happy to refund the error. But the FTC’s actions miss the point: this is not about protecting kids; it’s about protecting parents from their own carelessness. Should the FTC really be playing national nanny to parents?
For the FTC to bring enforcement actions, the Commission, by law, must show that the consumer harm outweighs the app store designs’ countervailing benefits. As TF’s Geoffrey Manne explains in an op-ed for the Wall Street Journal:
In the case of the Google and Apple settlements, the FTC did not balance the harms of the small number of unauthorized purchases against the widespread benefits of the user interface design in question…As the FTC morphs into the Federal Technology Commission it is becoming a top-down regulator rather than the law-enforcement agency it was created to be. Consigning several of the world’s most innovative companies to 20 years of bureaucratic oversight won’t serve anyone.
See the full op-ed here, and our other work on FTC Reform, especially:
- Highlights from TF and ICLE’s Luncheon on the FTC’s Use of Economics
- Geoffrey Manne’s oral remarks and written Congressional testimony on the the FTC@100
- Op-ed by Berin Szoka and Geoffrey Manney, “The Second Century of the Federal Trade Commission”