, Inc. (NASDAQ:AMZN) is being sued by the United States Federal Trade Commission (FTC), Julia Boorstin reported recently on CNBC.

The lawsuit, which was announced by the government agency on Thursday, is due to in-app purchases made by children. According to Boorstin, the FTC alleges that, Inc. (NASDAQ:AMZN) bill the parents of children who make unauthorized in-app purchases. It said that the company did not require passwords or consent for these purchases, she added.

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According to Boorstin, the FTC wants, Inc. (NASDAQ:AMZN) to refund money for those allegedly unauthorized in-app purchases made by kids.

FTC Chairwoman Edith Ramirez said that the company’s employees have noticed the problem the retail giant’s process has created. In a report from the Washington Post, Ramirez is quoted as saying:

“Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission. 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.”

Meanwhile, CNBC’s Scott Wapner noted that what is happening to the e-commerce giant is similar to what happened to Apple Inc. (NASDAQ:AAPL). However, the difference is that the iPhone-maker settled with the FTC, Wapner added.

Boorstin agreed and added that this lawsuit brings up yet again the very contentious issue of how companies like, Inc. (NASDAQ:AMZN) should handle in-app purchases made by children. The CNBC host said that this issue will have to be dealt with not just by Amazon but by any company which processes in-app purchases.

Watch the report below., Inc. (NASDAQ:AMZN) shareholders includes Matthew Tewksbury’s Stevens Capital Management which increased its stake in the company by a whopping 7212% percent during the first quarter of the year to 121,822 shares. However, that stake is just 1.1% of the hedge fund’s whole portfolio. Another hedge fund which vastly increased its holding in the company during the first quarter of the year is Marshall Wace Llp managed by Paul Marshall and Ian Wace. The firm increased its stake by 3862% by the end of March to 96,204 shares. This stake is just 0.58% of its whole portfolio.


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