The U.S. Federal Trade Commission is suing Amazon for billing account holders for millions of dollars of unauthorised in-app purchases made by children.

The regulator claims Amazon has violated the FTC Act by not requiring children to seek permission before they carry out a transaction.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC chairwoman Edith Ramirez on Thursday. "We are seeking refunds for affected parents and a court order to ensure Amazon gets parents' consent for in-app purchases."

In one particular children's title, players could buy virtual currency for use in the game at prices as high as $100.

According to the FTC, Amazon updated its system in 2012 to require a password but only for transactions of $20 or more, meaning children were still in a position to make unlimited, unauthorised purchases. In 2013, the system was updated again to require authorisation for certain charges. However, once a parent had entered a password, it opened a timeframe of between 15 minutes and an hour during which children could make unlimited purchases.

"Not until June 2014, roughly two-and-a-half years after the problem first surfaced and only shortly before the Commission voted to approve the lawsuit against Amazon, did Amazon change its in-app charge framework to obtain account holders' informed consent for in-app charges on its newer mobile devices," the FTC said.

In addition, the FTC noted that as early as December 2011, Amazon employees were aware of the seriousness of the problem and were highlighting it to one another in internal communications.

Amazon is the second big name to fall foul of the FTC for in-app purchases.

In January, Apple settled a similar case and agreed to refund parents who had incurred charges for unauthorised purchases made by their children. It agreed to pay a minimum of $32.5 million.