10 July 2014
Last updated at 14:27 ET
The FTC is seeking refunds for parents who were charged.
Amazon resisted a settlement offer from the FTC, and wrote in a letter to the regulator earlier this month that it would not accept tighter controls.
In January, Apple settled with the FTC over similar charges.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC chair Edith Ramirez in a statement.
"Even Amazon's own employees recognized the serious problem its process created," she added.
In response to the allegations, an Amazon spokesperson cited a letter the firm sent to the FTC on 1 July in which it wrote it was "deeply disappointed" by the FTC's demands.
"The [FTC]'s unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court," wrote Amazon.
'House on fire'
Amazon sued by US regulators over child in-app purchases
The FTC alleges that Amazon received hundreds of complaints from parents about unauthorised purchases
The
US Federal Trade Commission (FTC) has sued Amazon, alleging it allowed
millions of dollars of unauthorised purchases by children in its mobile
app store.
Amazon resisted a settlement offer from the FTC, and wrote in a letter to the regulator earlier this month that it would not accept tighter controls.
In January, Apple settled with the FTC over similar charges.
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC chair Edith Ramirez in a statement.
"Even Amazon's own employees recognized the serious problem its process created," she added.
In response to the allegations, an Amazon spokesperson cited a letter the firm sent to the FTC on 1 July in which it wrote it was "deeply disappointed" by the FTC's demands.
"The [FTC]'s unwillingness to depart from the precedent it set with Apple despite our very different facts leaves us no choice but to defend our approach in court," wrote Amazon.
'House on fire'
In its complaint, the FTC used the example of an app called "Ice Age Village", a game designed for children.
The FTC alleged the game "blurred the lines between what costs virtual currency and what costs real money", with "acorns" and "coins" both serving a purpose within the game as well as being available for purchase. The largest quantity purchase available in the app would cost $99.99.
In its complaint, the FTC also alleges that Amazon employees had warned in December 2011 that "allowing unlimited in-app charges without any password was '…clearly causing problems for a large percentage of our customers,' adding that the situation was a 'near house on fire'".
In January, Apple offered refunds of up to $32.5m (£19m) to parents who had been impacted by unauthorised charges and said it would change its billing practices to prevent future unauthorised charges.
The FTC alleged the game "blurred the lines between what costs virtual currency and what costs real money", with "acorns" and "coins" both serving a purpose within the game as well as being available for purchase. The largest quantity purchase available in the app would cost $99.99.
In its complaint, the FTC also alleges that Amazon employees had warned in December 2011 that "allowing unlimited in-app charges without any password was '…clearly causing problems for a large percentage of our customers,' adding that the situation was a 'near house on fire'".
In January, Apple offered refunds of up to $32.5m (£19m) to parents who had been impacted by unauthorised charges and said it would change its billing practices to prevent future unauthorised charges.
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BusinessWeek Amazon billed parents millions for kids' charges, feds allege [The Palm Beach Post, Fla. :: ] 1 hr ago
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MSNBC Newsweek FTC Files a Complaint Against Amazon for Deceptive Billing 3 hrs ago
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Reuters UK U.S. sues Amazon over purchases by kids using mobile apps 3 hrs ago
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Techworld.com Amazon allowed kids to spend millions on in-app purchases, FTC says 6 hrs ago
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Green Sheet FTC alleges Amazon unlawfully billed parents for in-app charges 7 hrs ago
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