Apple faces investigation in Italy over freemium iOS apps

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Italy’s Antitrust and Competition Authority is investigating Apple, Google and Amazon over freemium apps that could mislead users into thinking that the app is truly free, and doesn’t involve any additional costs.

The Wall Street Journal reports:

Google Inc., Apple Inc. and Amazon.com Inc. are being investigated by an Italian regulator to determine whether the Internet giants mislead people to make purchases in mobile phone apps that are initially free to download.

The Italian regulator said Friday it is investigating whether the three U.S. Internet companies—which run stores to download apps—and Gameloft,a French game developer, are misleading consumers with their use of the freemium model, which accounts for more than half of the EU online games market.

Freemium apps are increasingly emerging as the most popular model of monetisation for game and app developers, where the app itself is free, but customers are prompted to purchase add-ons like extra-lives, additional levels etc. at a cost.

The Italian regulator said:

“Consumers could be led to think, contrary to reality, that a game is completely free and therefore they don’t know ahead of time the game’s true cost. It appears also that there is a lack of information regarding how to exclude or limit the possibility of making a purchase inside the app.”

Apple and other companies have regularly been asked by regulators in US and elsewhere to better disclose that a free app has in-app purchases, and has also been sued over kids inadvertently raking up thousands of dollars of IAP credit card charges without the knowledge of their parents.

If Apple, Google and Amazon are found guilty, the Italian regulator could fine each of them up to €5 million ($6.8 million). Apple was previously fined $1.2 million in Italy for improper warranty disclosure.

Also see: Disable In-App Purchases on your iPhone or iPad

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Categories: iOS Apps