Federal Trade Commission to investigate the transparency of IAP, especially in kids' games

Purchase model maybe under review

Federal Trade Commission to investigate the transparency of IAP, especially in kids' games
There's no question from a publisher or developer's perspective, the in-app purchase model is highly valuable - consumers tend to part with more cash in the long run.

It's not intended to be a trick though. Rather, it offers players a chance to experience game before making any decision to spend cash.

Yet recent cases of players amassing huge bills unawares – as appears to be the case with Capcom's Smurfs' Village on the Apple App Store amongst other games – have suggested the IAP model might need some investigation.

And that's what the US Federal Trade Commission (FTC) appears to be interested in doing. 

Legal letters

The FTC's role in the matter appears to be the result of US congressman Ed Markey, who contacted the commission after the controversy surrounding Smurfs' Village was covered in the mainstream press.

"We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," FTC chairman Jon Leibowitz wrote in a letter in response to Markey's query.

"Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications."

Markey's concern is primarily focused on children and the App Store, but other markets such as Ovi Store offer similar mechanisms, and IAP is due to go live on the Android Market any day now, so this could be an issue for the entire industry.

"What may appear in these games to be virtual coins and prizes to children result in very real costs to parents," Markey said of the letter in the Washington Post.

"I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area."

Payment problems

We recently revealed that Apple itself was none too pleased over the number of complaints Smurfs' Village has amassed over recent months – a charge Capcom later denied.

The issue is just one part of a far wider evaluation of Apple's iOS payment models, however.

The Washington Post reports that, separately, the FTC and Justice Department have also launched antitrust reviews into the firm's recently announced App Store subscription service, primarily aimed at digital newspapers and magazines.

[source: Washington Post]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.