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 Following concerns raised by consumer groups in a number of European
countries, the EU executive called in industry members, policymakers
and consumer protection authorities to discuss clearer guidelines in
February.
Since then, Google, which owns the Android operating system for
smartphones, has proposed a number of measures that are being
implemented. These include banning the word "free" when games
contain in-app purchases and changing the default settings so that
payments have to be actively authorized before every purchase.
But the Commission regretted that Apple, maker of iPhone, had not
made any firm commitments on tackling the issue of payment
approvals.
"No concrete and immediate solutions have been made by Apple to date
to address the concerns linked in particular to payment
authorization," the Commission, the EU executive, said in a
statement.
Many of those playing the games are children or teenagers, who can
often make the in-app purchases without parental approval. It is
then up to the parents to foot the bill.
Industry members, including Apple, could face legal action from
national authorities if they are deemed to be breaking EU consumer
protection law.
Apple said it would address the concerns brought up by the
Commission, although it gave no time frame for when it might make
the changes, the EU executive said.
"Over the last year we made sure any app which enables customers to
make in-app purchases is clearly marked," said an Apple spokesman.
"We will continue to work with the EC member states to respond to
their concerns."
BOOMING APP INDUSTRY
The app industry in Europe is huge and growing. It employs more than
1 million people and has annual revenue of around 10 billion euros
($13.53 billion), of which about 80 percent comes from in-app
purchases, according to the Commission.
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National authorities will continue to engage with Apple to ensure
that it addresses the concerns they brought up in December last
year.
While the company has not met their demands on payment consent, it
has introduced clearer labeling on its iTunes store when apps
marketed as free also offer in-app purchases. It has also proposed
creating a specific email address through which enforcement
authorities can contact it about possible breaches of EU law and
discuss the problem with the app developers.
The Commission estimates that over half of the EU online games
market is advertised as "free" despite carrying hidden costs.
"In-app purchases are a legitimate business model, but it's
essential for app-makers to understand and respect EU law while they
develop these new business models," said Neelie Kroes, the EU's
telecoms commissioner.
In one case in Britain, an 8-year-old girl managed to run up a bill
of 4,000 pounds ($6,700) making "in-app" purchases from games such
as My Horse and Smurfs' Village. In that instance, Apple reimbursed
the girl's father.
In-app purchases can be disabled on most mobile devices.
($1 = 0.7391 Euros)
(Editing by Mark Heinrich)
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