A complaint against Amazon, gas for the storm-plagued Northweast, and no recession forecast for the country. Read about these and more of the day's top business news stories.
No Game: FTC Sues Amazon Over App Charges
The Federal Trade Commission filed a complaint in federal court Thursday against Amazon over charges that the company has not done enough to prevent children from making unauthorized in-app purchases, The Associated Press reports. Last week, Amazon said it would not settle with the FTC over the charges and was prepared to go to court. The e-tailer said in a letter that it had already refunded money to parents who complained. On Thursday Amazon offered no further comment. The dispute is over in-app charges in children's games on Kindle devices, where it can sometimes be difficult to differentiate whether users are spending virtual or real currency to acquire virtual items, the AP said. When it introduced in-app charges in 2011, a password was not required to make any purchase, from 99 cents to $99. Amazon instituted a password for charges over $20 in 2012. Last year, the company updated password protection again, but in a way that allowed windows of time where children could still make purchases, according to the FTC complaint. One woman cited in the complaint said her daughter racked up $358.42 in charges while playing a game.
Economists Predict No Recession on the Horizon
The National Association for Business Economics Outlook released Thursday says there is no recession expected in 2014 or 2015. The NABE Outlook survey of 50 economists was taken just days after the release of the June jobs report. It found economists believe the Federal Reserve will raise interest rates earlier than expected, and it also trimmed its estimates for second-quarter U.S. Gross Domestic Product. The panelists’ median forecast for annual second-quarter 2014 real GDP growth was 3 percent, a reduction from the earlier 3.5 percent median forecast. Sixty percent of the panelists said the chance of a recession in the next 18 months is below 10 percent. “Notwithstanding the difficult start to the year, opinion is widespread that the economy is on solid footing,’’ said Outlook survey chairman Timothy Gill.
Gasoline is On Standby For Hurricane Season
The U.S. Energy Department said its planned gasoline stockpile for the Northeast region of the country is in place in preparation for the possible need to supply victims of hurricanes in 2014. Earlier in 2014, the department announced the creation of the million-barrel gasoline reserve which was considered necessary after Superstorm Sandy in 2012, when much of the East Coast was without fuel. The Atlantic hurricane season runs from June 1 to November 30, and the busiest time is expected to be between mid-August and October. The U.S. has a strategic reserve of crude oil on the Gulf Coast with a capacity of 727 million barrels to help that area through its hurricane season as well.
California Man Sentenced For Selling Technology to China
Walter Liew, a California chemical engineer, was sentenced to 15 years in prison and fined $28 million for selling to China the technology to create a white pigment designed by DuPont. U.S. District Court Judge Jeffrey White said Liew “turned against his adopted country over greed.” An Oakland jury previously convicted the 56-year-old Liew of receiving $28 million from companies controlled by the Chinese government in exchange for the secret recipe for making cars, paper and other products whiter. The court case showed that U.S. authorities had been able to trace $22 million of the money to various companies in Singapore and Chinese companies controlled by Liew’s relatives. Two former DuPont engineers have also been convicted of economic espionage.
Breaking Up (Banks) is Hard to Do
In his first speech since becoming the Federal Reserve’s vice chairman last month, Stanley Fisher, all but dismissed the idea of breaking up the largest U.S. banks, saying on Thursday it is unclear that such a complex task would help stabilize the country's financial system. Reuters reports. The Fed’s No. 2 official also floated the idea of adding a financial stability mandate to all of the U.S. regulators under the umbrella of the Financial Stability Oversight Council, a coordinating committee. Fischer said regulators "need to be vigilant" in trying to prevent the next crisis, and must continue to work to end the need for the government to bail out big banks in a crisis. He recommends stricter capital requirements, rather than breaking up the biggest banks, he said.
Aero Faces “Uphill Battle” after Supreme Setback
Aereo, the television-over-the-Internet service, is refusing to disband despite a Supreme Court ruling against the company, The Associated Press reports. Using the High Court’s own language, Aero is trying to force broadcasters to treat it like a cable TV company and license their signals to Aero under a 1976 copyright law. But previous court rulings have said that Internet-based services do not qualify as such and the Supreme Court stopped short of declaring Aereo a cable company. Until Aereo voluntarily suspended service on June 28, it was streaming live and recorded television shows to customers' tablets, phones and other gadgets, an arrangement the company compared to customers who put their own TV antennas on rooftops. The Supreme Court rejected Aereo's argument, saying that the company acted like a cable system, so its service constituted a public performance subject to copyright royalties and licensing. "It's probably going to be an uphill battle," Seth Davidson, an Edwards Wildman Palmer attorney who specializes in communications and copyright law, told the AP. "It's Aereo's last shot.”