Apple, Google face scrutiny over in-app purchases

The two tech giants have been "invited" to discuss in-app purchase transparency with the European Commission.


Apple and Google have been invited to meet with EU representatives as the organization tries to tackle the problem of wholesale in-app purchases by adults and children.

Concerns raised by consumer groups in the U.K., Denmark Italy and Belgium have prompted the European Commission to hold talks with companies within the industry, policymakers and consumer protection authorities, according to Reuters.

Once the talks have reached a conclusion, the European Commission may consider clearer guidelines and regulations.

The main problem appears to be language use by developers when the apps are posted within the iOS app or Play stores. While many games are "free to download," they are not necessarily "free to play" -- and when purchases are automatically taken off linked cards and hidden costs come to light, this can result in a nasty shock for unwitting parents who have given their children access to smartphones or tablets. In addition, this can be considered misleading advertising.

In one example, an 8-year-old British girl ran up a bill of $6,700 making in-app purchases through games including My Horse. While Apple reimbursed the family, protection is needed to keep such mistakes from occurring in the first place.

The EU's justice commissioner, Viviane Reding commented:

"Misleading consumers is clearly the wrong business model and also goes against the spirit of EU rules on consumer protection. The European Commission will expect very concrete answers from the app industry to the concerns raised by citizens and national consumer organizations."

According to the European Commission, over half of online games in the E.U. are displayed as free, yet carry hidden charges. The market for online games is expected to be worth $86 billion within the next five years, and users in Britain, Germany, France, Italy, Spain, the Netherlands and Belgium spent an estimated 16.5 billion euros on online games in 2011, according to the Commission.