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February 26, 2013

Apple Class Action App Lawsuit to Get Quick Settlement

By Steve Anderson, Contributing TMCnet Writer

A recent court filing has shown that Apple (News - Alert) is planning to settle a class-action lawsuit brought against the company when it was found that customers were being charged for app purchases made by their kids. The settlement won't be large--at least not for each individual complaint--but it's likely to cost Apple quite a bit.

The case in question came up when it was discovered that the children of iTunes users were in some cases accidentally purchasing some applications from the apps section of iTunes. The case started with just five parents back in 2011, who protested that their kids were making in-game purchases for objects to be used in games. The games themselves, meanwhile, were often available for free, so the kids--and in many cases their parents--weren't aware that buying a thousand coins or stars or berries or what have you to be used in the game was not as free as the game itself was. The suit further alleged that Apple should have made that particular fact clear, so that parents would have known in advance that buying such items required a cash purchase.

This may sound like the kind of thing that might easily be brushed aside, but Apple's reach came back to haunt it a little bit on this one and the suit involved as many as 23 million users. Apple agreed to provide an iTunes credit in the amount of $5 to those affected, bringing the total value of the suit up to around $100 million. Additionally, those who claimed $30 or more in unauthorized downloads could get a cash refund instead of a credit, so the amount of the suit may well climb from there. In order to go through, the settlement will need court approval, and the court will be looking at the settlement on Friday.

The idea of free-to-play gaming is largely supported by in-game purchases, a practice which allows game makers to put out a game at no cost to the player but then recoup their investment--and hopefully make some profit in there too--by offering additional parts of the game at a cost. Items to increase a player's ability to play the game are on the top of the list, as well as cosmetic augmentations or new levels.

It's a viable market strategy, though indeed, it needs to be executed properly with a particular focus on education and permissions. People need to know that, in this case, "buying something" in a game isn't done with currency that can be earned in the game itself, but rather with actual currency that is earned outside of the game. It's an idea that can give game makers a whole new way to offer their products to more gamers while still being able to earn sufficient living to continue to make the games, but it has to be done correctly.

This class-action suit, meanwhile, illustrates just where some of the key deficiencies lie, and also provides insight on how to fix them, a point that will likely help fuel at least part of gaming's next generation.

Edited by Brooke Neuman

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