Google, Apple Face EU Scrutiny Over “Free Apps”

There are currently hundreds of thousands of mobile apps available in the market today for Android and iOS devices. While some of them require payment, others are free to download. But are free apps really free? This is what European regulators are trying to look at as complaints are increasing regarding mobile games that are advertised as free but then later on come with in-app purchases.

In-app purchase

European mobile app developers were called to a two day meeting by EU Justice Commissioner Viviane Reding and were warned that many of them may be in violation of consumer protection laws. The meeting which ends this Friday included the national enforcement authorities from several European countries as well as industry representatives such as Google and Apple outlined the rules that must be followed.

One of the biggest problems being faced is the in-app purchase model of most games. Right now, more than 50 percent of all EU online games are advertised as free despite coming with costly in-app purchases. This is misleading to the customer and may be in violation of certain laws.

Reding said that “Misleading consumers is clearly the wrong business model and also goes against the spirit of EU rules on consumer protection.”  She also added that she expects “very concrete answers” from the app industry.

Commissioner Neven Mimica who is responsible for Consumer Policy said that “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 top four concerns that are to be discussed in the meeting are as follows

  • 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.

Industry observer agree that children must be protected from making unnecessary purchases however they are also concerned that European regulators have misunderstood the “freemium” business model where an app is initially offered for free but then there is a certain charge for upgrades. Those who defend the freemium model say that it benefits the consumer in the end since it allows them to try something without buying. It also allows them to decide how much or how little they want to spend on an app.

via europa