FTC sues Amazon over in-game purchases by children

A

Online retailer Amazon is accused of hooking millions of dollars from underage users making unauthorized in-app purchases. The Federal Trade Commission filed a lawsuit Thursday charging that the company willingly allowed kids to set up purchases without the consent of their parents.

Though most were for smaller ammounts, some of the charges ranged as high as $99, and typically were for game weapons, clothes and other virtual bullshit installed on its Kindle Fire gadget.

"Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission," FTC Chairwoman Edith Ramirez wrote in a press release issued by the comission. "Even Amazon's own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."

Amazon's in-app purchase system, established in 2011 to help the firm catch up with competitors Apple and Google, was relatively rudimentary and lacked locks or passwords to prevent unuathorized users racking up huge bills. Within a month, internal emails show that Amazon was aware of "problems" that were "clearly causing problems for a large percentage of our customers," according to the FTC's lawsuit.

Amazon only added passwords months later, and did not apply them to purchases of less than $20 for a year. Even then, according to the suit, Amazon did not disclose that doing so once would enable further purchases for more than an hour.

The FTC settled a similar lawsuit with Apple earlier this year, when the company agreed to institute stricter policies and paid $32.5m in restitution. Amazon, informed of the pending lawsuit, said that it had no plans to change its system as Apple had, and would fight the action.

"We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn't want we refunded those purchases," Amazon's associate general counsel wrote in a response to the commission.

Part of the FTC's suit, however, alleges that the refund process itself is intentionally obscure and "rife with deterrents including statements that consumers cannot, in fact, get a refund for in-app charges."

Games aimed at youngsters are at the heart of the controversy, as they are typically free to download and play, only to bombard the user with enticements to pay for the virtual bullshit. The enticements are often clevery designed to "blur the lines between what costs virtual currency and what costs real money," writes the FTC, using visually similar icons and other psychological manipulations to generate unfair and unexpected charges.

Earlier this week, UK regulators ordered Electronic Arts to stop marketing its sleazy mobile game Dungeon Keeper as free-to-play after gamers complained that it was effectively unplayable without in-game paid upgrades.

How Hachette made the rope that Amazon is hanging it with


In my latest Guardian column, "How Amazon is holding Hachette hostage," I discuss the petard that the French publishing giant Hachette is being hoisted upon by Amazon. Hachette insisted that Amazon sell its books with "Digital Rights Management" that only Amazon is allowed to remove, and now Hachette can't afford to pull its books from Amazon, because its customers can only read their books with Amazon's technology. So now, Hachette has reduced itself to a commodity supplier to Amazon, and has frittered away all its market power. The other four major publishers are headed into the same place with Amazon, and unless they dump DRM quick, they're going to suffer the same fate.

Read the rest

Apple appeals against e-book verdict

Deepto Hajela with the AP: "Apple filed papers on Tuesday telling a federal appeals court in New York that a judge's finding it violated antitrust laws by manipulating electronic book prices 'is a radical departure' from modern antitrust law that will 'chill competition and harm consumers' if allowed to stand."

Charity sends Amazon a cake celebrating 3d anniversary of unpaid invoice


Metabrainz is the charity that oversees Musicbrainz, a free/open music metadata service that has gained in popularity since Gracenote took all the audio metadata its users keyed in by hand and enclosed it, denying all but the top bidders access to it. Musicbrainz is free to use, but has a premium, higher-availability service for commercial operators, like Amazon.

For three years now, Metabrainz has been chasing an unpaid invoice at Amazon. Metabrainz is a tiny, charitable nonprofit that relies on grants and donations for the majority of its operating capital, but commercial operators are also key to its survival. And Musicbrainz is an integral part of the plumbing of the Internet at this point, a powerful check against one player achieving dominance through a chokehold on a key resource.

So Metabrainz sent Amazon Headquarters a birthday cake, celebrating the third birthday of good ol' invoice #144. As a volunteer board member for the charity, I'd mightily appreciate it if someone at Amazon would take the time to nudge this invoice through the system.

We just delivered this to @amazon HQ in honor of a 3 year overdue invoice. Can we please get this mess fixed? --ruaok

Jeff Bezos, Amazon's switchboard operator

John Biggs interviewed Jeff Bezos: "What we’re finding right now is that even our heaviest Kindle ebook customers are still buying physical books. We’re seeing a lot of vinyl sales." [TechCrunch]

How an algorithm came up with Amazon's KEEP CALM AND RAPE A LOT t-shirt


You may have heard that Amazon is selling a "KEEP CALM AND RAPE A LOT" t-shirt. How did such a thing come to pass? Well, as Pete Ashton explains, this is a weird outcome of an automated algorithm that just tries random variations on "KEEP CALM AND," offering them for sale in Amazon's third-party marketplace and printing them on demand if any of them manage to find a buyer.

The t-shirts are created by an algorithm. The word “algorithm” is a little scary to some people because they don’t know what it means. It’s basically a process automated by a computer programme, sometimes simple, sometimes complex as hell. Amazon’s recommendations are powered by an algorithm. They look at what you’ve been browsing and buying, find patterns in that behaviour and show you things the algorithm things you might like to buy. Amazons algorithms are very complex and powerful, which is why they work. The algorithm that creates these t-shirts is not complex or powerful. This is how I expect it works.

1) Start a sentence with the words KEEP CALM AND.

2) Pick a word from this long list of verbs. Any word will do. Don’t worry, I’m sure they’re all fine.

3) Finish the sentence with one of the following: OFF, THEM, IF, THEM or US.

4) Lay these words out in the classic Keep Calm style.

5) Create a mockup jpeg of a t-shirt.

6) Submit the design to Amazon using our boilerplate t-shirt description.

7) Go back to 1 and start again.

There are currently 529,493 Solid Gold Bomb clothing items on Amazon. Assuming they survive this and don’t get shitcanned by Amazon I wouldn’t be at all surprised if they top a million in a few months.

It costs nothing to create the design, nothing to submit it to Amazon and nothing for Amazon to host the product. If no-one buys it then the total cost of the experiment is effectively zero. But if the algorithm stumbles upon something special, something that is both unique and funny and actually sells, then everyone makes money.

Dictionary + algorithm + PoD t-shirt printer + lucrative meme = rape t-shirts on Amazon

Indie booksellers sue Amazon and big publishers over DRM (but have no idea what "DRM" and "open source" mean)

A group of independent booksellers have filed a suit against Amazon and the major publishers for their use of DRM, which, the booksellers say, freezes them out of the ebook market:

Alyson Decker of Blecher & Collins PC, lead counsel acting for the bookstores, described DRM as "a problem that affects many independent bookstores." She said the complaint is still in the process of being served to Amazon and the publishers and declined to state how it came about or whether other bookstores had been approached to be party to the suit.

"We are seeking relief for independent brick-and-mortar bookstores so that they would be able to sell open-source and DRM-free books that could be used on the Kindle or other electronic ereaders," Decker explained to The Huffington Post by telephone.

Such a move would lead to a reduction in Amazon's dominant market position, and completely reshape the ebook marketplace.

A spokesman for Fiction Addiction declined to comment as legal proceedings are ongoing. The other plaintiffs and Amazon did not respond to a request for comment.

That sounds great, but when you read the complaint, you find that what they mean by "open source" has nothing to do with open source. For some reason, they're using "open source" as a synonym for "standardized" or "interoperable." Which is to say, these booksellers don't really care if the books are DRM-free, they just want them locked up using a DRM that the booksellers can also use.

There is no such thing as "open source" DRM -- in the sense of a DRM designed to run on platforms that can be freely modified by their users. If a DRM was implemented in modifiable form, then the owners of DRM devices will change the DRM in order to disable it. DRM systems, including so-called "open" DRM systems, are always designed with some licensable element -- a patent, a trademark, something (this is called "Hook IP") -- and in order to get the license you have to sign an agreement promising that your implementation will be "robust" (implemented so that its owners can't change it). This is pretty much the exact opposite of "open source."

It's a pity. I empathize with these booksellers. I hate DRM. But I wish they'd actually bothered to spend 15 minutes trying to understand how DRM works and what it is, and how open source works, and what it is, before they filed their lawsuit. Grossly misusing technical terms (and demanding a remedy that no customer wants -- there's no market for DRM among book-buyers) makes you look like fools and bodes poorly for the suit.

DRM Lawsuit Filed By Independent Bookstores Against Amazon, 'Big Six' Publishers [Andrew Losowsky/Huffington Post]

Reviews for a Predator Drone toy

The reviews on the Amazon page for a toy Predator drone are pretty trenchant:

You've had a busy play day - You've wiretapped Mom's cell phone and e-mail without a warrant, you've indefinitely detained your little brother Timmy in the linen closet without trial, and you've confiscated all the Super-Soakers from the neighborhood children (after all, why does any kid - besides you, of course - even NEED a Super-Soaker for self-defense? A regular water pistol should be enough). What do you do for an encore?

That's where the US Air Force Medium Altitude, Long Endurance, Unmanned Aerial Vehicle (UAV) RQ-1 Predator from Maisto comes in. Let's say that Dad has been labeled a terrorist in secret through your disposition matrix. Rather than just arrest him and go through the hassle of trying and convicting him in a court of law, and having to fool with all those terrorist-loving Constitutional protections, you can just use one of these flying death robots to assassinate him! Remember, due process and oversight are for sissies. Plus, you get the added bonus of taking out potential terrorists before they've even done anything - estimates have determined that you can kill up to 49 potential future terrorists of any age for every confirmed terrorist you kill, and with the innovative 'double-tap' option, you can even kill a few terrorist first responders, preventing them from committing terrorist acts like helping the wounded and rescuing survivors trapped in the rubble. Don't let Dad get away with anti-American activities! Show him who's boss, whether he's at a wedding, a funeral, or just having his morning coffee. Sow fear and carnage in your wake! Win a Nobel Peace Prize and be declared Time Magazine's Person of the Year - Twice!

This goes well with the Maisto Extraordinary Rendition playset, by the way - which gives you all the tools you need to kidnap the family pet and take him for interrogation at a neighbor's house, where the rules of the Geneva Convention may not apply. Loads of fun! [Maurice Cobbs]

This is the best toy ever. Finally, I can pretend that I'm a winner of the Nobel Peace Prize! It's like I'm sitting right there in the White House with my very own kill list! [Raini Pachak]

Star Wars memoir "A Long Time Ago" is back in the Kindle store


A followup to yesterday's post about how Amazon had nuked the Kindle edition of A Long Time Ago, Gib Van Ert's memoir about growing up with Star Wars, citing nebulous and incoherent trademark issues.

The Kindle edition is back. Amazon PR person Brittany Turner wrote, "Wanted to let you know that this book is now available in the Kindle Store." Ms Turner didn't offer any further explanation.

Presumably, it was a dumb mistake to begin with, but one that couldn't be corrected until there was enough publicity to get senior people to look in on the issue.

Meet the random shopper: Amazon gifts bought at a machine's whim

Boston coder Darius Kazemi’s interest in chance led him to create a bot that buys stuff on Amazon: a human decision made ineluctably alien by the randomness of a computer’s whim.

Read the rest

Amazon kicks self-published Star Wars memoir out of the Kindle store on nebulous and nonsensical trademark grounds


Update: The Kindle edition is back. Amazon PR person Brittany Turner wrote, "Wanted to let you know that this book is now available in the Kindle Store." Ms Turner didn't offer any further explanation.

Gib Van Ert sez,

Amazon has decided to remove the book I self-published on Kindle, "A Long Time Ago: Growing up with and out of Star Wars", from their store for an unspecified trademark issue. Their emails are vague, but they seems to being saying that I have to have Lucasfilm's permission before selling on their store a book that talks about Star Wars. It's a crazy position--Star Wars is a massive pop cultural and generational phenomenon, as my book tries to explain through a personal narrative.

No one has a right to have their book sold on Amazon, of course. It's their store and they can decline to sell things if they like. But given how they dominate the book marketplace, being banned from Amazon is a major problem for an independent author. And when it is done on a spurious ground--Amazon has never said that Lucasfilm themselves have complained, and why would they?--it verges on a free speech issue.

"A Long Time Ago" is in my review pile, and has survived several purges of books of similar vintage (I've had it there for a long time!), because it looks awfully good, and got a great review from Wired's GeekDad. I hope that this is just some junior functionary at Amazon having a freakout and that someone higher up will see sense and realize that there's no reason in the world not to carry Van Ert's book.

Weirdly, Amazon is still carrying the print edition of the book, which makes things even more inexplicable. If Amazon faces some risk from selling an ebook, it faces the same risk from selling the print edition.

Amazon removes A Long Time Ago from Kindle for supposed trademark infringement

Amazon Replacement Order Scam: anatomy of a social engineering con in action

Social engineering scams involve a mix of technical skills and psychological manipulation. Chris Cardinal discovered someone running such a scam on Amazon using his account: the scammer contacted Amazon pretending to be Chris, supplying his billing address (this is often easy to guess by digging into things like public phone books, credit reports, or domain registration records). Then the scammer secured the order numbers of items Chris recently bought on Amazon. In a separate transaction, the scammer reported that the items were never delivered and requested replacement items to be sent to a remailer/freight forwarder in Portland.

The scam hinged on the fact that Gmail addresses are "dot-blind" (foo@gmail.com is the same as f.oo@gmail.com), but Amazon treats them as separate addresses. This let the scammer run support chats and other Amazon transactions that weren't immediately apparent to Chris.

Others have reported on this scam, but word hasn't gotten around at Amazon yet, and when Chris talked to Amazon reps to alert them to the con, they kept insisting that his computer or email had been hacked, not understanding that the con artist was attacking a vulnerability in Amazon's own systems.

A little bit of sniffing finds this thread where users at a social engineering forum are offering to buy order numbers. Why? Because as it turns out, once you have the order number, everything else is apparently simple.

If you’ve used Amazon.com at all, you’ll notice something very quickly: they require your password. For pretty much anything. Want to change an address? Password. Add a billing method? Password. Check your order history? Password. Amazon is essentially very secure as a web property. But as you can see from my chat transcript above, the CSR team falls like dominoes with just a few simple data points and a little bit of authoritative prying.

Two-for-one: Amazon.com’s Socially Engineered Replacement Order Scam (via Hacker News)

Amazon reviews for "binders" (full of women) are funnier than Romney's original gaffe

You knew it was coming. Binders full of women, the funny Amazon reviews. (HT: Tara McGinley)

Best Buy a bad buy for investors

Best Buy made just $12m in profit on revenues of $10.6bn in the last quarter, falling from $150m over the same period last year. With stock and sales alike slumping, the firm suspended its profit forecast and share buybacks. Best Buy knows exactly what the problem is—it freely admits that everyone uses it to check out gadgets they then buy cheaper online—but hasn't found a way to turn the tide. [BBC and Dealnews]

More about how the Sahara creates the Amazon

On Monday, I posted about an incredibly fascinating study linking the minerals that fertilize the Amazon rainforest to a specific corner of the Sahara desert in the country of Chad. That lake of sand—once an actual lake the size of California—is what keeps the Amazon green and verdant.

The interesting thing is that the study is actually not anything new. It came out in 2006. I heard about it from science writer Colin Schultz. Earlier this week, Colin went on News Talk 610 CKTB out of Niagara Falls, Ontario, to talk about how he stumbled across the study and why it's important far beyond simply connecting the desert and the jungle.

The interview delves into the subject in a lot more depth. In fact, it's a great demonstration of how reading a single research paper can be interesting, but doesn't necessarily give you the full picture of what's actually going on in science. Turns out, what we know about how dust travels to the Amazon has important implications for how we think about climate change and geoengineering. Also great: Colin comparing the volume of dust traveling from the Sahara to the volume of several Honda Civics. It's short, and very much worth listening to.

You can follow Colin Schultz on Twitter. BTW: He'd like you to know that when he says "bioengineers" in the interview, he means "geoengineers".

Read More:
A 2010 Nature News article on the connection between the Sahara and the Amazon.
• Geophysical Research Letters on changes in dust transport over time.
• NASA on the way that dust affects climate.
A 2010 follow-up to the 2006 paper by the same group of researchers. Colin says that this gets more into the details of how the dust becomes an important fertilizer in the Amazon.

Image: rainforest, a Creative Commons Attribution (2.0) image from tauntingpanda's photostream