The agreement settles a complaint from the Federal Trade Commission that Apple collected millions of dollars through in-app purchases made by children without parental consent, the FTC said Wednesday.
As part of the agreement Apple is required to change its billing practices to require "express, informed consent" from consumers before it can charge them for an in-app purchase, CNET reported.
"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," FTC Chairwoman Edith Ramirez said in a statement. "You cannot charge consumers for purchases they did not authorize."
The FTC said Apple violated its regulations by not informing parents that after entering a password to approve an first in-app purchase would allow additional purchases to be made for 15 minutes without further authorization needed.
While Apple's in-app purchase screen does prompt for a password it doesn't reveal that it creates opportunity for additional, unauthorized purchases for during those extra minutes, the FTC said.
Apple had been besieged with complaints from parents about children having made unauthorized in-app purchases that added up to millions of dollars in total, it said.
Apple said it acknowledged the need be more aware of how children interact with online services.
"Protecting children has been a top priority for the App Store from the very beginning, and Apple is proud to have set the gold standard for online stores by making the App Store a safe place for customers of all ages," the company said in a statement after the FTC announcement. "Today's agreement with the FTC extends our existing refund program for in-app purchases which may have been made without a parent's permission."