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Release of Docs to Reveal How Facebook Made Money Off Children

Documents related to a 2012 lawsuit against Facebook in which children, sometimes unwittingly, spent their parents’ money on games via the social site will be unsealed, according to a Monday ruling from the United States District Court.

The court gave Facebook ten days to file unredacted documents in accordance with the ruling.

The 2012 lawsuit dealt with minors spending their parents’ money in games without permission and sometimes without even being aware that they were spending actual currency in Facebook games. Some of the documents reveal that Facebook employees were even aware that children were spending large amounts of money without parental awareness, according to Reveal, the news agency of The Center for Investigative Reporting (CIR).

“A glimpse into the soon-to-be-released records shows Facebook’s own employees worried they were bamboozling children who racked up hundreds, and sometimes even thousands, of dollars in game charges,” a post from Reveal stated. “And the company failed to provide an effective way for unsuspecting parents to dispute the massive charges, according to internal Facebook records.”

For example, one internal memo stated that “In nearly all cases the parents knew their child was playing ‘Angry Birds’, but didn’t think the child would be allowed to buy anything without their password or authorization first,” according to Reveal.

The 2012 case came after plaintiff Glynnis Bohannon contended that her child asked to spend $20 on Facebook Credits, an in-game currency, to use on “Ninja Saga.” Bohannon agreed and used her credit card, but her child was able to continue spending money without her permission beyond the $20, ultimately reaching “several hundred dollars,” according to the court document.

Bohannon attempted to get a refund from Facebook, but was denied until she filed against Facebook.

Another plaintiff, Steven Wright, had a similar experience with his son and had over $1,000 of disputed charges. In the case of Wright, his son had not asked for initial permission, and he was granted only a partial refund of $59.90 with an additional $999.30 in charges remaining unrefunded, though a Facebook representative said it had “refunded the charges to [Mr. Wright’s] funding instrument,” according to the court document.

Complaints in the lawsuit Bohannon v. Facebook contended that “under its policies, Facebook ‘routinely refuses requests by children and their parents and legal guardians to provide refunds for transactions that are subject to disaffirmance under California law.'”

Ultimately, the case was settled, and the plaintiffs received refunds. Following the conclusion of the lawsuit, the CIR requested documents related to the Bohannon v. Facebook case be released in full, a request that was ultimately “granted in part and denied in part.”

In response to Variety‘s request for comment, a Facebook spokesperson offered the following statement:

“We were contacted by the Center for Investigative Reporting last year, and we voluntarily unsealed documents related to a 2012 case about our refund policies for in-app purchases that parents believe were made in error by their minor children. We intend to release additional documents as instructed by the court. Facebook works with parents and experts to offer tools for families navigating Facebook and the web. As part of that work, we routinely examine our own practices, and in 2016 agreed to update our terms and provide dedicated resources for refund requests related to purchased made by minors on Facebook.“

In another glimpse of one of the to-be unsealed documents from the case, a Facebook employee refers to a minor spending money in the game as a “whale.” The term “whale” is used in the industry to refer to big spenders in games, often in mobile or casual games.

The following excerpt is allegedly from one of the unsealed documents as spotted by Reveal:

Gillian: Would you refund this whale ticket? User is disputing ALL charges…

Michael: What’s the users total lifetime spend?

Gillian: It’s $6,545 – but card was just added on Sept. 2. They are disputing all of it I believe. That user looks underage as well. Well, maybe not under 13.

Michael: Is the user writing in a parent, or is this user a 13ish year old

Gillian: It’s a 13ish yr old. says its 15. looks a bit younger. she* not its. Lol.

Michael: … I wouldn’t refund

Gillian: Oh that’s fine. cool. agreed. just double checking

As of 2012, “Facebook’s refund policies for individuals between 13 and 17 were the same as its policies for adults, but … policies for minors under 13 were different,” according to the court document. This could explain why the employees were speculating over the user’s age.

Regardless, that Facebook employees would refer to a minor as a “whale” implies intention behind purchases, which brings it back to the issue of whether a parent should be held responsible when a child, even unknowingly, makes massive purchases with their credit card.

The eight documents, which Facebook requested remain sealed, fall into the categories of “refund policies… fraud detection practices… and …  sensitive business and financial information.”

The court sided with Facebook for several exhibits, largely under grounds that information within was sensitive business information that would put the company at a competitive disadvantage (that’s where the “denied in part” ruling comes from).

The court disagreed with some key information, such as Facebook’s request to seal a document which contains ” dollar values related to transactions, refunds, and chargebacks involving minors between 2008 and 2014″ on the grounds that this information is not going to harm Facebook’s business interests and is “of great public interest.”

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