Italian antitrust body investigating Apple, others over 'freemium' app sales
Italy's Antitrust and Competition Authority on Friday said it is investigating whether Apple, Google, Amazon and Gameloft mislead the public into spending money on so-called "freemium" apps that offer in-app purchases.
The Italian regulator is attempting to determine whether the companies' respective app stores and freemium apps offer sufficient information about in-app purchases, reports The Wall Street Journal. Also under investigation are sales practices that seemingly trick users into paying for in-game content.
"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," the regulatory body said. "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."
As noted by the publication, the Antitrust and Competition Authority's investigation comes after the European Union asked companies to tread lightly with the freemium app model. The EU said consumers may be confused by the idea of downloading an app for free, then buying content after the fact that will be charged to their credit cards.
The EU also said it was working with Italian regulatory bodies over the issue and will continue to push for reform.
Apple has been the target of multiple investigations from the Italian Antitrust Authority, including a $1.2 million fine in 2011 for unfair commercial practices associated with standard product warranties. The regulator added another $264,000 for the same warranty issue a year later despite modifying AppleCare policies.
The Italian regulator is attempting to determine whether the companies' respective app stores and freemium apps offer sufficient information about in-app purchases, reports The Wall Street Journal. Also under investigation are sales practices that seemingly trick users into paying for in-game content.
"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," the regulatory body said. "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."
As noted by the publication, the Antitrust and Competition Authority's investigation comes after the European Union asked companies to tread lightly with the freemium app model. The EU said consumers may be confused by the idea of downloading an app for free, then buying content after the fact that will be charged to their credit cards.
The EU also said it was working with Italian regulatory bodies over the issue and will continue to push for reform.
Apple has been the target of multiple investigations from the Italian Antitrust Authority, including a $1.2 million fine in 2011 for unfair commercial practices associated with standard product warranties. The regulator added another $264,000 for the same warranty issue a year later despite modifying AppleCare policies.
Comments
This is just dumb.
I'm not a big fan of the freemium model, I'd rather pay for a game outright. But having said that, nobody has ever forced me to play or download any freemium game. I have a little village in Clash of Clans that I check in on sometimes. Nobody has ever forced me to spend a dime on that game.
If other people wish to spend their own money on any freemium game, then that is their choice. Freemium games are the apps that bring in the most money on the appstore, so it's not surprising that companies do release freemium games, and we won't be seeing any less in the future.
Who are these weak and disgusting people that would blame Apple or anybody else for their own decisions? Are they mentally handicapped? Do they have no self control? No matter what their defect is, it certainly doesn't have anything to do with Apple.
Isn't it great that the people who live in Europe have a bunch of useless bureaucrats in Brussels looking out for them? I'm not sure if this rule is still in effect, but they're the same geniuses who had a rule stating that all bananas must be "free of abnormal curvature" and at least 14 cm in length.
And believe me, I'm not just criticizing Europe here, because here in the US there are more and more politicians that wish to emulate their lame European counterparts, and turn everything into a nanny state.
This is once again truly ridiculous. I'm getting really fed up with politicians who believe everything needs to be regulated at government/EU level.
It was always possible to look up an app's in-app purchases. Additionally to seeing what is being sold within the app, there is now a marker/warning underneath every app title offering this. I really don't see how this is confusing to people, simply bloody read before clicking download. Even if one didn't care before, one is clearly warned, when an app prompts you to pay for something. I'm not sure what seems so misleading about "give me 2.99 for five more lives".
Secondly, this whole Freemium model is kind of what consumers wanted, it is what makes the most money to some devs and hence they're running with it. No one offered this just for the kicks. People voted with their wallets. So quite soon after the race to the bottom on the App Store defined most apps shouldn't cost more than 99 cents, people started expecting everything for "free". This is the real problem here, this is why most big name games are Freemium, rather than paid.
I don't like freemium games either, in fact I do not spend a dime one them. I'd love to spend 5-10 bucks for some nice games and be done with it and yet they're freemium. That's because I'm old-school, most people don't seem ready to buy good apps anymore, they want to get them for free. This is sad really, because as long as this model keeps on making more money than the classic "purchase a license" way, people won't even experience what good games used to be like, because all they get is grinds designed around paywalls and artificial time gates designed to frustrate you.
Well, either way. Rather than demonising developers' ways of making money off apps, the EU should perhaps look into starting some Europe wide campaigns about what software really is, what it takes and how much it costs to develop and market it. People need to understand that while they can't "touch" an app it still has a lot of value and how ridiculous it is being ready to get a coffee for 5 bucks, while not spending 2 bucks on an app they might use every day. It still amazes me every day, when I see that people simply want the best apps for free. Not only that, but they're also fantastically good at writing critical reviews of those apps, which they got for free. It really puzzles me what people must think. Where is the developer making money, how is he supporting himself giving everything away?
So, EU, instead of subsidising dying car brands, dying industries, outdated form of energy and big corporations to keep on offering their precarious working conditions rather than moving further east, how about you start doing some good and run some campaigns on how software has an actual value.
I think an investigation of this type is fair. If Apple is doing enough they will be found innocent. Let's hope this seriously tarnishes freemium apps, cause the majority of them are a con.
Sane words.
The sad thing is that all too many Europeans agree. The result are societies that are increasingly adverse to risk taking and innovation. Dying businesses get subsidized. Lazy workers can't be fired.
And that folly is spreading here. For the first time since data began to be taken, we have fewer business startups than failures. You see the result in fewer jobs, particularly for young adults, and a declining middle class.
I'm sure they'll find Apple has taken many steps to ensure that people know what they are downloading.
An investigation is something that should be applauded. They haven't accused anyone for the moment.
Apple (along with Google) have made it pretty obvious now about apps that offer in-app purchases. There's the 'Offers in-app purchases' label and the small '+' sign above the Download button that says 'Free'.
That is ridiculous. Even most of the apps that offer in-app purchases make it pretty clear that you're about to buy something with real money. If you don't pay attention to that, that's your fault. It is like the news some time ago where consumers were filing suits over companies offering satellite navigation, which guided them into a sea while driving.
The only benefit I can see coming from this is some sort of censure against the 'freemium' model of apps.
Keep your pity.
Thanks.
The Europeans.
It's not the pity that matters. It's the reality. It's a younger generation growing either without jobs because of a morbid economy (Spain & Greece) or stuck in dead-end jobs because employers find it almost impossible to weed out the lazy and talentless (France). That exists here too. I saw it when I worked for Boeing. But the scale is far greater and the roots run much deeper.
And of course this country under the Democrats are lurching down the same path. I recently watch interviews of students at George Washington University about the possibility of Hillary as President. What was remarkable was that virtually none of those students were asking if she was qualified for the job. All they saw were quotas. Obama, perhaps the least capable person ever elected to the Presidency, had filled the black quota. Now it was time to fill the woman quota. When asked point blank, most could not name anything she'd done as Secretary of State. Thinking along those lines simply did not occur to them.
There was, however, one exceptionally clueless guy who named Benghazi as her chief success, the first murder of a U.S. ambassador since the 1970s. I found that amusing in a sick sort of way. Four members of our embassy were killed despite their advance warnings about the danger and nothing was done during the hours-long attacks to rescue them. If that's a success, they we can only conclude that the deaths of eight embassy staff would be an even greater success and the deaths of twenty would put Hillary on the fast-track for the Noble Peace Prize.
There's a near perfect contrast. Just after he took over the British Navy just before WWI, Winston Churchill was at a party when someone informed him that, due to the long European peace, the navy's vast stores of munitions were almost unguarded. Churchill immediately left the party, called British army leaders and had troops sent that night to guard those stores until the navy could establish its own guards.
That's real leadership and its something that those trapped in the entitlement mentality don't grasp. In Europe, it's not being fired even though lazy and incompetent. Here it's becoming President after either never done anything of significance in public life (Obama) or having no success after over two decades in the national spotlight (Hillary). So no, there's nothing bad about Europe that isn't also true of the U.S. And the same is true at the consumer protection level, where no amount of consumer stupidity should have adverse consequences.
One final comment. Europe's problem isn't that it has problems. Every country has those. Europe's problem is that all too many Europeans are even willing to consider that their problems really are problems. It's a classic illustration of a civilization going down because it refuses to recognize its ills.
This is just dumb.
It’s Italy.
Right under the title of the app it says, In App Purchase. Scroll down a little further and it show what they are. But if users choose not to read, I guess that is Apple fault.
It wasn't always there. I am definitely happy it is now. The next set of labels they could add include:
- Subscription
- Pay to Unlock
- Episodic DLC
- Nickel and dime
The first three don't bother me, so much, though the last one is what really gets to me. Examples of the last category include the Smurfs and Skylanders. They are abominations that take the fun out of 'escapism'. I can't enjoy a game if I have to be worrying about what impact it is going to have on my bank account every minute.
If applications are upfront about their purchase model, then I am in a position to make a choice that suits what I am comfortable with. I understand developers need to make money and I have no issue paying for an application that I feel is worth it, based on my budget, but I don't like being bait and switched.
The next thing if such labels were added is the ability to selectively filter them out when I do a search.
If you have purchased an app that promised one thing, but delivered something decidedly "less" then you may want to get a refund, something I've done exactly once because the app I bought lost functionality after a related app was upgraded. The refund process was fast and painless. I deleted the app on my own.
With regard to the Italy/EU issue I have a suggestion for Apple. Only offer completely free or paid apps at different tiers including the add-ons. If they insist on acting like idiots, give them no options.
All Apple needs do is to split the app types into three categories: paid, in app purchase, and free. And free should be free.