Is it really accurate to label a game like Candy Crush or Pet Rescue "free" if you're bombarded with dozens of offers to buy -- for real money -- extra lives or additional weapons? The U.S. Federal Trade Commission (FTC) and the European Union have found all sorts of potential problems with that practice, which is likely the reason Apple has just relabelled download buttons for certain apps in its store with "Get" instead of "Free."
Previously, when users wanted to access free apps or games, they would tap buttons labelled Free to start the downloads. Now, however, they tap the Get button. The new label has started appearing this week on Apple Store apps once marked Free that require no upfront payments. Many such apps -- not only from Apple but from many other sites as well -- are more accurately described as "freemium" downloads, as customers often have plenty of opportunities to spend actual cash as they begin using these apps.
Earlier this year, Apple agreed to refund numerous customers who were billed for in-app mobile purchases made by children without their parents' permission. Its settlement with the FTC amounted to a minimum of $32.5 million.
'True Costs Involved'
Many countries within the European Union (EU) have also fielded complaints from their citizens about such in-app purchases. In a joint action this summer, the European Commission and member states notified Apple, Google and other software companies about several changes to their consumer protection expectations.
Under the new EU position, so-called free games "should not mislead consumers about the true costs involved" or contain direct messages to children encouraging them to make in-app purchases. Users should also be "adequately informed" about purchase and payment options, and should be provided with an e-mail address for sending questions and complaints, the EU said.
When it announced those policies in July, the EU noted that Google had agreed to make a number of changes in response and expected to complete those by the end of September. Apple, on the other hand, provided "no firm commitment" or time frame for making changes, according to the EU.
FTC Complaints and Settlements
Under the agreement it reached with the FTC, Apple was required to modify its billing practices by the end of March to ensure consumers provided "express, informed consent" for any in-app purchases. The agency also ordered the company to give customers the option to withdraw that consent at any time.
In one case reported by the FTC, a woman discovered that her child had spent a total of $2,600 on in-app purchases while playing "Tap Pet Hotel." According to a 2012 report from the agency, 84 percent of free-to-download apps for kids allowed real-money purchases during use.
The FTC has taken a number of actions in recent years related to online and mobile apps that target children. In September, for example, Google settled an FTC complaint by agreeing to refund at least $19 million to consumers whose children made unauthorized purchases in Android apps downloaded from Google Play.
In July, the FTC also filed a complaint in federal court alleging that Amazon had billed customers for "millions of dollars" in unauthorized in-app purchases by children. Apple is contesting that complaint.