Bad UX Costs Millions for Amazon, Apple, and Google
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Published on May 1, 2016
Even some of the biggest and most prominent technology companies can make costly user experience (UX) mistakes and might benefit from some UX courses. Bad UX is at the core of problems that brought Amazon, Apple, and Google into the cross-hairs of the United States Federal Trade Commission (FTC). Apple and Google resolved the dispute, and fixed the UX problems, refunding customers millions in billings. The cost of poorly implemented UX to Apple was $32.5 million in refunds, while Google agreed to refund $19 million. Amazon refused to settle and forced the FTC to take the issue to court. Last week a federal judge found that Amazon’s UX mislead consumers, and the cost of bad UX is likely to extend into the tens of millions of dollars in both penalties and mandatory refunds.
Jude rules against bad UX
The UX problem stems from in-app purchases, where users are able to buy virtual items within a game. Specifically, the user experience within games which allowed children to make purchases without a parents’ authorization. The federal judge ruled against Amazon before the case even made it to trial, granting a request for summary judgment in favor of the FTC and against Amazon. The judge in the case said with the decision, “Given the design of the Appstore and procedures around in-app purchases, it is reasonable to conclude that many customers were never aware that they had made an in-app purchase.”
According to the judgment against Amazon, the company received complaints from thousands of consumers’ in-app charges they didn’t authorized but were instead purchased by children. In some cases the charges incurred by children extended into the hundreds of dollars. Amazon attempted to claim that they made sufficient disclosures about in-app purchases being available inside of apps that were free. Yet the judge indicated that a disclosure was not enough, and that in-app purchasing within free children’s games should not have been allowed. All three companies have since taken steps that prevent children from making purchases.
The exact cost of this UX mistake for Amazon isn’t yet final. The judge has ordered the FTC and Amazon to determine the exact amount of refunds that are owed for practices that have been found to be unlawful.
While a court ordering Amazon to refund millions might typically be cause for alarm on Wall Street, the financial markets have been upbeat on Amazon this week. Shares of Amazon (NASDAQ:AMZN) surged more than 10 percent in the days following this court order, as the company reported profitable quarter – the fourth quarter in a row in which they have been profitable. In the first quarter of 2016 Amazon indicated they earned $513 million in profits and had total revenue of $29.1 billion. These numbers are up by 28 percent year over year and exceeded analyst’s expectations.
The in-app purchasing issue appears to be of little concern, as Amazon is generating revenue from it’s traditional sales of products along with cloud computing. The cloud computing will expand to $10 billion in sales this year alone according to CEO Jeff Bezos.
About the author
Jennifer Smith is a user experience designer, Photoshop expert, educator and author based in Boston. She is the author of more than 20 books on design tools and processes, including Adobe Creative Cloud for Dummies, Adobe Creative Cloud Digital Classroom, and Photoshop Digital Classroom. She has been awarded a Microsoft MVP three times for her work with user experience design in creating apps for touch, desktop, and mobile devices.
Jennifer delivers UX training and UX consulting for large Fortune 100 companies, small start-ups, and independent software vendors. She has been hired by Adobe and Microsoft to deliver training workshops to their staff, and has traveled to Asia, Europe, India, the Middle East, and across the U.S. to deliver courses and assist on UX design projects. She has extensive knowledge of modern Windows UX Design, having worked closely with the Windows team to create educational material and deliver UX workshops to key partners globally on behalf of Microsoft. Jennifer works with a wide range of prototyping tools including Fireworks, Photoshop, Illustrator, Blend for Visual Studio, and Balsamiq.