Apple has reached a settlement with the FTC over in-app purchasing, ending a long legal battle that challenged much of the basic functionality of the App Store. As a result of insufficient parental controls, the company is required to refund customers who have been billed for faulty charges, paying out a total of $32.5 million to 37,000 different customers. Apple will also be required to change its billing practice "to ensure that it has obtained express, informed consent from consumers before charging them for items sold in mobile apps."

In one case, a girl spent $2,600 in 15 minutes

According to a companywide letter from Apple CEO Tim Cook, posted by 9to5mac, Apple solicited the claims after hearing complaints of in-app purchases that occurred without a parent's permission. In response, the company emailed every iOS user that had made an in-app purchase in an app designed for children, 28 million accounts in total. Of those 28 million, 37,000 responded with claims and were reimbursed for their purchase. Despite the sweeping nature of the FTC settlement, Cook told employees it "does not require us to do anything we weren’t already going to do."

The FTC took particular issue with Apple's 15-minute window for charging, in which a single password entry can be used to authorize unlimited charges during the following 15 minutes of usage. FTC Chairwoman Edith Martinez said in one case, a girl spent more than $2,600 in that 15-minute window, using the app "Tap Pet Hotel." Martinez said the issue was not the duration of time, but the fact that parents approving in-app purchasing have no way of knowing the full extent of the charges they could incur during that window. The settlement requires Apple to modify its billing practices to allow for more explicit consent, with new safeguards in place no later than March 31st of this year.

Tim Cook's letter to employees is reproduced below.