UK OFT launches in-app purchase probe

UK OFT launches in-app purchase probe

12 APR 2013

The UK’s Office of Fair Trading (OFT) is investigating whether freemium apps are pressuring or encouraging children to pay for additional content.

The probe will focus on whether free games include “direct exhortations” to children to strongly encourage them to purchase content or persuade parents to make purchases for them. This practice is unlawful under the Consumer Protection (from Unfair Trading) Regulations 2008.

Many free apps offer users the ability to pay for various services and content such as upgraded membership, virtual currencies — in the form of coins, gems or fruit — and new levels or features.

The issue of whether the full cost of games is made clear when they are downloaded or accessed will be considered by the OFT. Children or parents could potentially be making decisions when prices are not transparently advertised at the beginning of the purchasing process.

The OFT has written to companies developing and distributing free web or mobile app-based games, requesting details of in-game marketing to children.

In addition, parents and consumer groups are being asked to get in touch with information about “potentially misleading or commercially aggressive practices” they are aware of in such games.

The OFT cited the fact that 80 of the top 100 growing Android apps in the UK on 9 April, were free to install and raised revenue through in-app purchases, with single purchases ranging from a few pence to more than £70.

“The OFT is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected. We are speaking to the industry and will take enforcement action if necessary,” said OFT senior director for goods and consumer, Cavendish Elithorn.

The OFT did not identify companies subject to the investigation and stressed that “no assumption should be made that any companies being investigated have broken the law”.

The body plans to publish its next steps by October.

Apple recently settled a lawsuit filed by a group of parents claiming that its App Store purchasing policies allowed children to spend large amounts of money too easily when unsupervised.

The company recently started to flag freemium apps with in-app purchasing functionality to alert parents to apps that could lead their children to spend money without their knowledge.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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