• by Wendy Davis  @wendyndavis, February 3, 2016

The Federal Trade Commission is urging a federal judge to rule that Amazon engaged in an unfair business by charging parents for in-app purchases made by their children.

"Amazon billed parents and other account holders millions of dollars without their consent for charges children incurred while playing games on mobile devices," the FTC says in papers filed Tuesday with U.S. District Court Judge John Coughenor in Seattle.

The FTC says it's entitled to summary judgment against Amazon because there aren't any disputed facts that would warrant a jury trial. Consumers "suffered significant monetary harm that they could not reasonably avoid and that was not outweighed by any benefits to consumers or competition," the FTC says in its motion.

Amazon counters in separate papers filed Tuesday that it "is confident that the evidence at trial will demonstrate that it acted responsibly, proactively, voluntarily, expeditiously, and ultimately successfully to address an unanticipated issue that affected only a small percentage of Appstore customers."

The legal disputes dates to July of 2014, when the FTC sued Amazon for allegedly allowing children to make in-app purchases without their parents' consent. Before suing Amazon, the FTC settled similar cases with Apple and Google; both companies agreed to provide refunds to parents.

When Amazon initially launched its app store, in November 2011, the company allowed children to make purchases without entering a password, according to the FTC. Amazon later began requiring passwords, but only for charges of more than $20, the FTC alleges.

The FTC says these practices resulted in bills to parents for unauthorized in-app purchases by their children. The agency is seeking an order order requiring Amazon to reimburse parents for any charges that were incurred without their consent, and an injunction prohibiting the company from engaging in unfair practices in the future.

Amazon says in its new court papers that it has always "made design choices to enable parents to avoid unwanted purchases by children."

The company adds that it enabled parents to require passwords, and always sent confirmatory emails after purchases were made. "Any Amazon account holders who did not make the in-app purchase themselves immediately would be able to see in the confirmatory email the price paid and the source of the charge," the company asserts.

But the FTC argues that Amazon's policies weren't clear. "Consumer feedback about unauthorized in-app charges by children was visceral and revealing, displaying the depth of consumer confusion about Amazon’s practices," the agency writes.

Amazon also argues that in June of 2014, one month before the lawsuit was filed, it changed its billing policies. Since that date, the company has asked account holders to decide at the time of a first in-app purchase whether to require a password for all future purchases.

While the online retailer is seeking a trial on the question of whether its practices were unfair, it's also asking Coughenor to rule now that the FTC lacks grounds to obtain an injunction that could affect future billing practices.

"There is no evidence showing a cognizable risk of future harm that would warrant a permanent injunction in this case," the company says. "Amazon has demonstrated its voluntary, good-faith, responsible commitment to resolve the issue since the launch of in-app purchasing -- both long before and continuing after the FTC began its investigation -- through today."

Coughenor will hold a hearing in the matter on Feb. 26.