Apple Loses in Short-Term, Wins in the Long Run with Smart Litigation Risk Management Strategy
Yesterday, Apple Co. announced a settlement with the Federal Trade Commission (FTC) where it would refund at least $32.5 million largely to parents who were victims of excessive in-app purchase by their kids. In some cases, kids racked up thousands of dollars of purchases in iPad and iPhone games. The Washington Post has the story:
Now, Apple had a good argument that parents should be responsible for the actions of their children. But, Apple made the smart litigation risk management decision. Instead of advancing a legally correct but unpopular position, they agreed to pay a nominal amount to victims and are using this settlement for positive p.r. (Apple is now gushing about its protection of children).
When a company can remove emotion from the equation, they can make a sound business decision. Sometimes, the right answer is “fight to the death.” Other times, the right answer is settlement and a positive public relations campaign. As one of the most successful companies in the world, Apple made the smart litigation risk management decision.