Why Amazon Is Liable for Your Kids' Unauthorized Purchases -- Tech Roundup

Editors' pick: Originally published April 27.

In a surprise ruling, Judge John Coughenour of the U.S. District Court for the Western District of Washington ruled Amazon (AMZN) - Get Report is liable for unauthorized in-app purchases from children. The Federal Trade commission sued the tech giant in 2014, arguing it "failed to make proper disclosures to parents regarding purchases made by their children while using apps," according to Reuters.

Amazon has already made changes to the in-app purchases since the lawsuit was filed but the online retail will still be on the hook.

The judge sided with the FTC, saying  Amazon did not do enough to protect its users. Apparently, the software allowed kids to make as many in-app purchases as they wanted without parental knowledge or without the use of a password. Now, if you spend more than $20, you have to enter a password. (Hmmm, how much stuff can a kid buy for under $20?)

Apple (AAPL) - Get Report and Alphabet (GOOGL) - Get Report have faced similar litigation, and settled. So maybe the Amazon ruling shouldn't have come as such a surprise.

Shares of Amazon closed at $606.57 Thursday, down 1.7%.

Bernie Sanders is hoping to win the Democratic nomination for President, but his cause wasn't helped when many of Sanders' pages on Facebook (FB) - Get Report were taken down earlier this week after being slammed with pornographic spam.

Were supporters of Hillary Clinton responsible for causing the Sanders site to automatically shut down?

However, there is a silver lining of sorts for Sanders. The temporary shutdown brought him a ton of free media attention.

The spam sucker punch doesn't sit well with many at a time where people don't trust the political system. 

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Speaking of the social media king, Facebook stock is up big in after-hours trading after reporting adjusted earnings that increased to 77 cents per share from 42 cents per share in the year-ago period. The figure topped analysts' estimates for earnings of 62 cents per share, and was 10% better than the highest forecast of 41 Wall Street analysts. Revenue, including advertising revenue, exceeded expectations.

Shares closed at $108.89 Thursday, up a fraction in regular trading -- then the earnings came out. Now the stock is up 9%. 

Tesla Motors (TSLA) - Get Report has been spending plenty on repairs -- upwards of $1,043 per vehicle. That's more than double the $400 GM (GM) - Get Report and $429 Ford (F) - Get Report average on their repairs.

It's also no surprise that Tesla sets aside more for repairs too: $2,036 per vehicle in 2015, compared to the $332 and $308 GM and Ford put away, respectively.

GM and Ford both sell a lot more cars that Tesla, so the average warranty cost per vehicle would be lower in most instances. Total warranty costs are much higher, though.

CEO Elon Musk has said his company needs to be better when it comes to burning through cash and getting closer to profitable operations. One such method to getting there is cutting down on warranty costs -- especially with the Model 3 launch coming next year.

Considering that the Model X is relatively new, it shouldn't come as much of a surprise that repairs and kinks are being worked out as production increases. That's just part of the auto business.

But Musk is likely trying to work out as many issues as quickly and efficiently as possible, to prevent cash burn in the short-term and prevent similar issues from arises with the production of the Model 3 in the longer term.

The company has some 400,000 preorders for the vehicle, far outpacing the production queue of the Model S and Model X.

Already though, the number of issues found in the Model X have plunged 400% over the last six months, which is an optimistic sign for investors and Musk that maybe the company will be able to lower its warranty costs after all.

Shares of Tesla closed at $251.47, down 0.9%.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.