A previous investigation revealed Facebook personnel had direct knowledge children were spending large sums of parents’ money on in-app purchases without parental knowledge or permission
Washington (June 27, 2019) – Senators Edward J. Markey (D-Mass.) and Richard Blumenthal (D-Conn.), members of the Commerce, Science and Transportation Committee, today sent a letter to Facebook urging the company to institute policy changes in light of evidence that third party game developers manipulated children into spending their parents’ money. Previous reporting by the Center for Investigative Reportingdemonstrated that Facebook personnel had direct knowledge that children were spending large sums of their parents’ money on in-app purchases without parental knowledge or permission. New evidence now reveals that Facebook has still not instituted key policy changes to address this issue. Senators Markey and Blumenthal initially wrote to Facebook CEO Mark Zuckerberg about this topic in January.
In their latest letter, the Senators express concern about Facebook’s policies on what it considers an acceptable “chargeback rate,” the percentage of charges from in-app purchases that a credit card company disputes at the request of Facebook users. Recent reporting suggests that Facebook’s payment policies continue to allow an individual developer to maintain a chargeback rate of up to five percent before potentially penalizing it, well above the standard recommended by the Federal Trade Commission (FTC). The Senators are urging Facebook to reduce from five to one percent (or lower) its acceptable chargeback rate for third-party developers.
“Facebook’s actions thus far have failed to demonstrate a commitment to ending friendly fraud on your platform,” write the Senators in the letter to Facebook CEO Mark Zuckerberg. “Permitting a chargeback rate of as much as 5% runs contrary to industry standards and suggests that Facebook is unwilling to address the problem of young users spending their families’ money without parental awareness or consent. Profiting off the mistakes and deception of children can never be considered fair.”
A copy of the Senators’ letter can be found HERE.
The Senators ask Facebook to respond to questions that include:
In October 2018, Senators Markey and Blumenthal called on the FTC to investigate whether Facebook violated the Children’s Online Privacy and Protection Act after it was found that apps were accessing children’s sensitive information without providing notice or obtaining the required consent.