Europe's "app economy" is booming. It employs over 1 million people and is expected to be worth €63bn in the next five years. According to the external app analytics platform Distimo, around 80% of the revenue – estimated at over 10 billion EUR per year – of one supplier comes from purchases made by consumers from within an application by which consumers access special content or features, commonly called "in-app" purchases. For the app economy to develop its full potential and continue innovating, consumers need to trust the products.
At present over 50% of the EU online games' market consists of games advertised as “free”, although they often entail, sometimes costly, in-app purchases. Often consumers are not fully aware that they are spending money because their credit cards get charged by default. Children are particularly vulnerable to marketing of "free to download" games which are not "free to play". Following complaints from all over Europe, the European Commission is meeting today and tomorrow (27 and 28 February) with national enforcement authorities and large tech companies in order to discuss these concerns. Industry will be asked to commit to providing solutions within a clear timeframe so as to ensure proper consumer protection for apps customers.
Participants to the Games apps meetings on consumer protection include:
● European Commission
● Danish Consumer Ombudsman
● Direction générale de la concurrence, de la consommation et de la répression des fraudes, France
● Office of Fair Trading, UK
● Autorità Garante della Concorrenza e del Mercato, Direzione Generale per la Tutela del Consumatore, Italy
● Directorate-General Economic Inspection, Federal Public Service, Economy, SMEs, self-employed and Energy, Belgium
● Department, State Consumer Rights Protection Authority of the Republic of Lithuania
● Ministère de l'Économie, Direction du marché intérieur et de la consommation, Luxembourg
● The Interactive Software Federation of Europe
The Commission hopes to reach a common understanding with industry to address the concerns raised by consumers. In any case, the European Commission says that it together with the national consumer rights enforcement authorities will continue to follow up with any necessary action.
Notably, Apple recently reached an agreement with the FTC over in-app purchases for App Store applications. The company will be refunding more than 37,000 in-app purchases that parents have claimed their children have made -- paying out a minimum of $32.5 million. The company had been negotiating with the FTC for months over purchases that children had made allegedly without their parents' consent.