European Commission meeting with Google and Apple to discuss freemium games and in-app purchases

The European Commission and its Member States are concerned about in-app purchases in freemium games and have asked to meet with Apple and Google as part of a two-day session that focuses on consumer protection for apps. This meeting is a response to consumer complaints about false advertising by freemium apps and in-app purchases by consumers who were unaware they were being charged. The technology companies in attendance will be asked to provide solutions that protect consumers when they download and make purchases within an app. Commissioner Neven Mimica, responsible for Consumer Policy said: “Consumers and in particular children need better protection against unexpected costs from in-app purchases. National enforcement authorities and the European Commission are discussing with industry how to address this issue which not only causes financial harm to consumers but can also put at stake the credibility of this very promising market. Coming up with concrete solutions as soon as possible will be a win-win for all.” The Commission has four areas of concern that will be addressed over the two days. They include: Games advertised as “free” should not mislead consumers about the true costs involved Games should not contain direct exhortations to children to buy items in a game or to persuade an adult to buy items for them Consumers should be adequately informed about the payment arrangements and purchases should not be debited through default settings without consumers’ explicit consent Traders should provide an email address so that consumers can contact them in case of queries or complaints This is a big issue for developers as restrictions on in-app purchases may affect their ability to generate revenue for an app. According to Distimo, in-app purchasing is the dominant form of revenue for iOS apps, with 92% of Apple App Store revenues in November 2013 coming from freemium apps that offer in-app items for purchase. These freemium apps made headlines a few years ago when children racked up thousands of dollars of charges via in-app purchases. Apple responded to these earlier concerns by requiring a password before authorizing a purchase. The change was included in iOS 4.3. Apple also added the ability to block al in-app purchases using Restrictions in iOS. Continue reading →

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