Amazon is being sued by the US government over claims the online retail giant has not done enough to stop children making unauthorised downloads of apps.
The legal action by the Federal Trade Commission (FTC) comes after the company said it would not agree to an out-of-court settlement.
Amazon previously told the FTC that it was prepared for a court battle and that it had refunded parents who complained after being billed for the apps.
The dispute centres on children's games downloaded via Kindle tablets, and the difficulty differentiating virtual and real currency for purchase of virtual items.
In-app charges were introduced in 2011 and no password was required for purchases between $0.99 and $99 (£57).
The FTC has tried to reach a settlement with Amazon over the issue The following year passwords were introduced for purchases over $20 (£11.60).
But the FTC said that although it updated password procedures last year, there was a period where children could still buy apps.
One customer complained that her daughter had incurred charges of more than $350 (£200) while playing a game.
The FTC said thousands of consumers had been affected and unauthorised charges ran into the millions.
FTC consumer protection director Jessica Rich said: "A central tenant in consumer protection is that you need to obtain consumer consent before placing charges on their bills.
"That applies all places, from brick-and-mortar stores to app stores."
The legal action seeks both refunds for consumers and a ban on billing account holders for in-app charges made without their consent.
PayPal has altered its user agreement to help stem unauthorised purchases Last week the FTC launched a similar lawsuit against T-Mobile, and in January it reached a $32.5m (£19m) settlement with Apple over in-app charges.
Charges racked up by children without parental consent has also caused concern for PayPal, which is owned by eBay.
In April, Sky News revealed PayPal was changing its terms and conditions for account users.
A new clause, activated last month, said users must agree to "take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."
Paypal denied it was banning account users sharing their computers.
A spokesman said: "The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised."
Meanwhile, the celebrated children's author Allan Ahlberg revealed he turned down a lifetime achievement award after learning it was sponsored by Amazon.
Amazon routes its UK sales through an office in Luxembourg for tax purposes In a letter to the Bookseller, he complained about Amazon's UK tax arrangements, whereby revenue earned in Britain is accounted for in low-tax Luxembourg.
Amazon's UK subsidiary reached sales of £4.3bn last year but it paid only £4.2m in tax.
Mr Ahlberg wrote: "Tax, fairly applied to us all, is a good thing. It pays for schools, hospitals - libraries!
"When companies like Amazon cheat - paying 0.1% on billions, pretending it is earning money not in the UK, but in Luxembourg - that's a bad thing.
"We should surely, at the very least, say that it is bad and on no account give it any support or, by association, respectability."
:: Sky News has tried to reach Amazon for comment on both the in-app charges and Mr Ahlberg's action, but no spokesperson was available.
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