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Apple to settle in-app purchases lawsuit with cash payments and iTunes credit

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In-app purchases Draw Something
In-app purchases Draw Something

Apple has agreed to settle a class action lawsuit that could cover more than 23 million App Store users. The case was brought by parents whose children had racked up large bills on virtual items and currency in free iOS games. Under the terms of the settlement, posted by GigaOm, account holders will be able to claim $5 or more in iTunes credit or a larger cash refund if they can attest that purchases in a "qualified app" were made without their knowledge.

The case dates back to 2011, before Apple had added further parental controls and password protection in iOS 4.3; plaintiffs alleged that the company hadn't made it clear enough that "free" apps had the ability to charge money. The settlement proposal is yet to be approved by a judge, but once that happens Apple should be able to go ahead with the payments later in the year or in early 2014. Although it's unclear how much this could end up costing Apple, the settlement notes that most payments are expected to be $5 iTunes credit refunds.