The UpStream

FTC Sues Amazon for Letting Children Make Purchases on Parents' Devices

posted Sunday Jul 13, 2014 by Nicholas DiMeo

FTC Sues Amazon for Letting Children Make Purchases on Parents' Devices

Remember last year when Apple had to shell out million to customers who weren't watching their kids make purchases on their iPhones? Well, Amazon is in a similar boat this year as the Federal Trade Commission has gone after Amazon for "unlawfully billing" parents for app purchases made by children. It seems that a regulatory group is now stepping in to protect parents from supervising children on their devices.

The FTC says there are currently no passwords or PINs are required for children to make purchases on the Amazon app store. Consumer protection director for the FTC, Jessica Rich, had this to say on the matter.

Many millions were spent on unauthorized charges. This is about the age old principle of consumer protection. We plan to obtain refunds and put it back in consumer's pockets. We're now headed to court.

The FTC further alleges that Amazon had knowledge of this and did not do a thing about it until the agency confronted Amazon with its policies. The Commission also added that many customers contacted the FTC to complain about these "unauthorized" charges. No word on how many complained nor when the investigation began.

Rich continued by saying that, "If you feel you've been had and want a refund contact the FTC."

Let me add some clarification here. There's no unauthorized charges taking place. Parents are complaining because their kids made purchases and they didn't watch over the things happening on these devices that cost hundreds of dollars.

Granted, similar to Apple's hand being forced in the same case after the ruling, Amazon does not have a PIN or password in place for in-game purchases, so kids can tap at-will and ring up charges as they please. And, like Apple, I can see that changing here, too. What's interesting here is the FTC has been investigating for a while and has actually caught Amazon employees acknowledging that there are no safeguards and not doing anything about it for years. Again, perhaps they figured that parents would be cautious on giving their kids a device connected to both the Internet and their bank account, but I'm afraid we probably can't make that assumption anymore.

In the end, this case will probably end just like the Apple one. Parents complain because their children charged their credit card on in-app digital goods and currency and the businesses did nothing to protect them. But in the same breath they complain that they don't want businesses snooping and watching over them.

I will end this piece by saying that the Windows Phone team thought ahead and all apps require a PIN or password before being able to make any purchases during any part of installing or using an app. And Microsoft didn't have to go through a lawsuit or an FTC investigation to make that decision.

Comedy Central Trying Out Online Syndication with South Park on Hulu Plus

posted Sunday Jul 13, 2014 by Scott Ertz

Comedy Central Trying Out Online Syndication with South Park on Hulu Plus

If you're a big fan of Comedy Central's programming, you probably know that the best way to watch their shows online is directly on their website. From big names to single season flops, you can watch most of Comedy Central's content for free right on the web. Their business model for providing this content for free has been advertising revenue.

Apparently Comedy Central is no longer content with the amount of money they earn from ad revenue and is trying out a new business model. Teaming up with Hulu, Comedy Central is making all episodes of all seasons of South Park available exclusively through Hulu Plus.

This represents a shift in business concept. Rather than relying exclusively on advertising revenue, Comedy Central is now relying exclusively on syndication fees. This will also change the behavior of how to watch South Park online. For the first time ever South Park will be available only behind the Hulu Plus paywall.

While this may be temporary good news for Comedy Central's bottom line, it may not remain as good news in the long run. After offering all of their online content for free for so long, such a dramatic shift might turn viewers off. However, since we are talking about South Park, maybe not. People have continued to watch the show on television and online even as the creators themselves have gotten tired of it.

So, will Comedy Central be able to build on their strong viewership or will this move turn viewers away from South Park altogether? Let me know your thoughts in the comments.

$16 Million Raised to Curve Videogame Communication

posted Sunday Jul 13, 2014 by Scott Ertz

$16 Million Raised to Curve Videogame Communication

In-game communication is not a new concept. PC gamers have been using services like Ventrilo for years. Xbox and PlayStation both have game communication built into their platforms. However, while communication on the consoles has continued to improve the PC has not kept up.

A company called Curse is intent on changing that. Their recently open beta of Curse Voice works a little differently than most PC game communication software. Rather than having to share your platform id or username with another member, the service will automatically determine that friends are in the same game with you and offer communication automatically. This makes in-match communication significantly easier in quick-hit, random assignment games.

Because it is such a big shift in the norm, over a million users signed up within the first week. If they can keep up that pace, the company believes that they will have over 10 million by year's end. That is a lot of active users on a brand new platform, especially in a market in which gamers have expected to see little to no changes.

Obviously this caught the attention of many. Among those taking notice were new investors. Curse's latest round of funding brought in $16 million, including money for existing investors, one new investor and a capital loan. This new cash will help the company build, enhance and officially launch the platform.

It's always good to see new blood enter an industry, especially when that market has been so long stagnant. Hopefully Curse Voice will be able to be successful on its own and inspire the rest of the industry to catch up.

Have you checked out the Curse Voice public beta? Let us know your impressions on how it works in the comments.

China Claims that iPhone is a Threat to National Security

posted Sunday Jul 13, 2014 by Scott Ertz

China Claims that iPhone is a Threat to National Security

Every country has a different way of focusing its economy. Some, like the United States, focus on knowledge work. Others, like China, focus on manufacturing. No matter your focus, though, one good rule of thumb is to not insult the companies that make your economy possible.

The Chinese government has taken a different view on this concept. This week of the Chinese state media accused the iPhone of being a national security threat. Referencing the iPhone's common places feature, they stated that anyone with access to the phone's data could easily determine the habits of a Chinese citizen.

For those who may not be aware of the feature, which is also available as part of Windows Phone Cortana, it follows your activities and logs the places you visit often. This allows Siri or Cortana to navigate easily to your favorite spots. From anywhere you can say "Take me to work" and be taken to your common spot.

Clearly, this data in the wrong hands could be dangerous. With the NSA's many data requests from Apple, it's not unreasonable for the Chinese government to be fearful. However, publicly speaking out against a company that spends a tremendous amount of money in your country manufacturing their product may not be the best way to solve the perceived problem.

Also, suggesting that that company has a backdoor for the NSA into their products may not be a great PR move either. Apple fired back against this allegation saying that they have never created a backdoor for any agency. They even went so far as to say they've never directly worked with the NSA, but had only replied to requests.

The chances that Apple and Foxconn will move their manufacturing out of China is low. However, a public statement like this certainly will make the companies consider their options. Apple has recently started to move some manufacturing back to the United States after all.

Jury Finds Apple Not Guilty in Patent Troll Case Against Emblaze

posted Sunday Jul 13, 2014 by Nicholas DiMeo

Jury Finds Apple Not Guilty in Patent Troll Case Against Emblaze

Back in 2010, Emblaze, an Israeli company, sued Apple for patent infringement on several popular iPhone applications, including the Major League Baseball app. A jury ruled this week after a two-week trial that Apple did not actually infringe upon those patents and will not have to pay the $511 million that Emblaze demanded.

The patent in question is US Patent Number 6,389,473 B1, called "Network Media Streaming" and Emblaze claimed that it was being infringed in Apple's use of HTTP Live Streaming (HLS). Basically, any time that a customer would've watched live content on an iPhone and iPad since 2009, Emblaze said Apple was in violation.

Emblaze claimed the above-mentioned MLB app and also apps from ABC News, PGA, NFL and ESPN were infringing on the patent. The Apple Keynotes and iTunes festival were also accused but the jury said that none of these actually infringed on the patent. In the end, Emblaze wanted $511 million in damages from 2009 up until June of 2013 but all of that was dismissed by the court. It should be noted that Emblaze tried to sue Microsoft in 2012 for infringing on the same patent.

How did all of this come about? Well, according to Apple, Emblaze actually developed several audio products that they intended to license and sell to wireless companies. However each and every product was pretty much a total failure and Apple's lawyers said that Emblaze was "trying to make up for that lack of success in the courtroom." And, citing the Microsoft lawsuit, the attorney team also said Emblaze is merely a "company that just sues companies." This, according to Gary Shapiro and many others, is the classic "patent troll" case. And, to put things into perspective, Emblaze was demanding over $500 million when its annual revenue for 2013 was only $1.9 million. If that isn't just a courtroom company, I don't know what is.

It only took the jury a little more than a day to reach a unanimous verdict. With this victory, Apple is currently 2-0 in patent troll cases this year, and has a third suit coming up in a few months.

Aereo Changes Focus, Tries to Become a Cable Operator

posted Sunday Jul 13, 2014 by Nicholas DiMeo

Aereo Changes Focus, Tries to Become a Cable Operator

Two weeks ago, the Supreme Court essentially killed Aereo, at least in its current business state. CEO Chet Kanojia said that the company was going to find a way to continue to operate and it appears Aereo has found that way. Now, Aereo is going to try to become a cable operator.

It started with a letter sent to US District Judge Alison Nathan on Wednesday, which explained Aereo's new path and focus.

Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal. After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions. If Aereo is a 'cable system' as that term is defined in the Copyright Act, it is eligible for a statutory license, and its transmissions may not be enjoined (preliminarily or otherwise).

So, Aereo now looks to become a cable company and is going to try and pay the necessary fees and licenses to do so. The entire letter basically outlined that new plan and that it would operate in "accordance with the terms of the Supreme Court's decision," which makes all of this very interesting. Obviously the broadcasters have already spoken up and said that this is only happening because of the ruling. CBS wrote on Wednesday that, upon hearing the news about Aereo's major business model shift, the Aereo case that's made its way back to a Manhattan federal court should be dismissed.

Aereo's refusal to clearly specify whether, when and in what fashion it intends to continue operating. Aereo never before pled (much less litigated) Section 111 as an affirmative defense. Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court's decision automatically transformed Aereo into a 'cable system' under Section 111 given its prior statements to this Court and the Supreme Court.

Many analysts predicted this case was far from over, and they were completely right. Several people, including myself, predicted that Aereo would try and claim a different stance and go the cable operator route, and it appears all of that has come to fruition. Now, whether or not that actually happens is a whole other thing to deal with. Naturally, we'll have the updates as they occur but for now, you can read the joint letter that was filed to the courts in the source link below.

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