Out-Law / Your Daily Need-To-Know

Apple urged to commit to better consumer protection on 'in-app purchases'

Out-Law News | 21 Jul 2014 | 3:50 pm | 2 min. read

Apple has been asked to provide "specific details" of the measures it intends to take to address concerns about the protection consumers have against running up unexpected bills when playing games via mobile apps.

Late last year EU regulators, through the Consumer Protection Cooperation (CPC) Network, called on leading providers of apps, including Apple and Google, to offer "concrete solutions" to concerns they expressed about in-app purchases in online games.

The regulators said consumers should not be misled about "the true costs involved" in playing games that are advertised as being 'free'. They said games should not directly encourage children to "buy items in a game or to persuade an adult to buy items for them" and said consumers should be not be charged through in-game settings that don't require consumers' "explicit consent" to be processed. It also said the games providers should display an email address so as to receive consumers' queries or complaints.

However, the European Commission said Apple had not yet addressed some of the concerns.

"Although, regrettably, no concrete and immediate solutions have been made by Apple to date to address the concerns linked in particular to payment authorisation, Apple has proposed to address those concerns," the Commission said. "However, no firm commitment and no timing have been provided for the implementation of such possible future changes. CPC authorities will continue to engage with Apple to ensure that it provides specific details of changes required and put its practices into line with the common position."

Apple defended the measures it has put in place to protect against unexpected bills from in-app purchases.

"These controls go far beyond the features of others in the industry," Apple said, according to a BBC report. "But we are always working to strengthen the protections we have in place, and we're adding great new features with iOS 8, such as Ask to Buy, giving parents even more control over what their kids can buy on the App Store."

In its statement the Commission said that it has invited the associations of online game developers and platforms have also been asked "to reflect on concrete measures that they could take to address the issues raised", and to assess whether new guidelines or industry standards could be created "incorporating the CPC position".

In the US, consumer protection regulator the Federal Trade Commission (FTC) has accused Amazon of breaching US laws (12-page / 348KB PDF) over the way consumers have been charged for items purchased within games sold via their mobile apps store. The FTC has filed a legal complaint against the company in which it accused Amazon of failing to "obtain parents’ or other account holders’ informed consent to in-app charges incurred by children" in breach of US law.

"In total, parents and other Amazon account holders have suffered significant monetary injury, with thousands of consumers complaining about unauthorised in-app charges by their children, and many consumers reporting up to hundreds of dollars in such charges," FTC's legal complaint said.

The regulator has called on the US court to order Amazon to "prevent future violations" and to issue compensation, among other measures of redress, to customers.