US and European regulators continue to scrutinize Google, Amazon, and Apple over in-app purchases
Companies like Google, Apple, and Amazon are being brought to task on both sides of the Atlantic for allowing app developers to nickel-and-dime their users with in-app purchases.
On one side of the Atlantic, the European Commission has praised Google for its commitment to changing its in-app purchase policies while chiding Apple because "no firm commitment and no timing have been provided for the implementation of such possible future changes."
Google has promised to stop labeling games that offer in-app purchases as "free," to require a password whenever a purchase is made by default, and to develop "targeted guidelines for its app developers to prevent direct exhortation to children." Apple's proposal was not discussed, but that hasn't stopped the company from responding to the European Commission's release with a statement of its own. As the company told Engadget after the release was made public:
Apple takes great pride in leading the industry in parental controls that are incredibly easy to use and help ensure a great experience for parents and children on the App Store. The parental controls in iOS are strong, intuitive and customizable. And over the last year we made sure any app which enables customers to make in-app purchases is clearly marked. We've also created a Kids Section on the App Store with even stronger protections to cover apps designed for children younger than 13.On the other side of the ocean, the Federal Trade Commission has sued Amazon for its in-app purchase policies. The agency alleges that Amazon has withheld refunds from consumers who requested them after their children racked up hundreds of dollars of charges. Amazon is also accused of dragged its feet in amending its in-app purchase policies, even though it knew it was causing problems almost since its application marketplace first launched in 2011.
Unlike Apple, which agreed to pay $32 million to consumers after it faced similar complaints in January, Amazon has no intention of settling with the FTC. The company claims that it did provide refunds to anyone who requested one and that settling the case could stifle innovation in the in-app purchase market, which is just starting to establish itself alongside other forms of pricing. (You've gotta love it when companies complain that regulators are anti-innovation.)
I'm inclined to side with the regulators in this instance -- and yes, I know that sentence will be used to "prove" that I'm an anti-capitalistic monster who hates everything about the Valley. As I wrote when the FTC's complaint against Amazon was first announced earlier this month:
It’s clear that Amazon needs to improve its in-app purchase policies. Though the company has made some improvements over the years, it has yet to create a system that won’t screw parents for allowing their children to spend some time with a tablet. That might not have required a formal complaint from the FTC, but now that such a complaint has been filed anyway, Amazon might as well take the chance to prove that it still cares about consumer happiness despite its recent attempts to use consumers and authors as weapons in its ongoing fight with publishers.In-app purchases aren't a problem for just one company. Hell, they aren't even considered a problem on just one continent. If the last few months have made anything clear it's that the monetization strategy of the moment is being scrutinized by regulators and consumers from both sides of the Atlantic, and that no company is going to be spared in their efforts to make sure children aren't being exploited and parents aren't being screwed over by app developers.
It's okay to nickel-and-dime someone who knows what they're doing. Relying on vague policies and the hope that companies like Apple and Amazon won't dissuade consumers from handing their devices to their kids and letting 'em purchase goods inside an application, however, isn't.
[illustration by Hallie Bateman]