Facebook FTC Fine Could Be $22 Million; Docs Reveal Facebook Refused Refunds For Underage Spending
Facebook

The Federal Trade Commission is reportedly set to hand down a fine on Facebook for the user data leaked during the Cambridge Analytica fiasco. The investigation began back in March of 2018.

According to CNBC the FTC’s fine could exceed $22.5 million. As noted in the CNBC report…

“The fine is expected to be in excess of the $22.5 million fine the FTC imposed on Google in 2012 for allegedly violating an agreement to improve privacy practices, the Post reported. Sources told the Post Facebook has talked with FTC staffers about the investigation.”

Shortly thereafter Facebook was also in the news for a number of other privacy leaks, including a report where Facebook admitted to allowing various companies to read private messages from users, as reported by Tom’s Guide.

Reveal News is also reporting that things could get even worse for the social media giant, as unsealed documents are expected to be made public soon based on a class action lawsuit that was settled back in 2016, where Facebook refused refunds of microtransaction purchases made by kids using their parent’s credit card that was attached to the account.

In many of the cases, the kids didn’t know the parent’s card was attached to the account, or the parents were unaware that the card was still accessible for the kids to use while the kids were playing games, which resulted in some kids racking up thousands in microtransaction fees.

Unlike some safety systems that have warnings and prompts before someone spends real money on virtual items, Facebook did not have those prompts in place, so a lot of kids were mistakenly spending real money on virtual items, and Facebook was well aware of it.

According to Reveal News, Facebook relied on the confusion from people to continue to profit from them, with the article stating…

“In nearly all cases the parents knew their child was playing Angry Birds, but didn’t think the child would be allowed to buy anything without their password or authorization first,” according to an internal Facebook memo. The memo noted that on other platforms, such as Apple’s iPhone, people were required to reauthorize additional purchases, such as by re-entering a password.

 

“A Facebook employee noted that children were likely to be confused by the in-game purchases because it “doesn’t necessarily look like real money to a minor.”

 

“Yet the company continued to deny refunds to children, profiting from their confusion.”

Parents are definitely responsible for keeping an eye on their credit cards, and what their kids play. However, some companies – like Facebook – remove a lot of the barriers and checks to ensure that people don’t become victims to slick virtual monetization schemes that prey on people who may not be 100% focused on what they’re signing up for or what their kid is playing.

Remember, this is no longer the NES era where you just put in a game and play.

Only some of the documents related to the way Facebook handled the refunds (or lack thereof) will be made available. The judge struck down the motion to have additional documents unsealed, which the judge deemed as potentially harmful to Facebook’s public image.

(Thanks for the news tip Narmy)

About

Billy has been rustling Jimmies for years covering video games, technology and digital trends within the electronics entertainment space. The GJP cried and their tears became his milkshake. Need to get in touch? Try the Contact Page.

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