Italy's Antitrust and Competition Authority has launched an investigation into whether Apple, Google, Amazon, and Gameloft mislead users into making purchases in apps that are initially free to download, reports the WSJ.
The move by Italy's Antitrust and Competition Authority comes after the European Union earlier this year called on companies to reform their use of the "freemium" model in which apps are free to download, but then later require payments that often get charged to credit cards by default. The EU says consumer confusion with the freemium model threatens the long-term health of the continent's booming "app economy" that employs more than one million people and is forecast to produce €63 billion in total revenue in 2018, more than triple last year's level.
"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 regulator 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."
Notably, Apple recently reached an agreement with the FTC over in-app purchases for App Store applications. The company agreed to refund 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.
Read More
The move by Italy's Antitrust and Competition Authority comes after the European Union earlier this year called on companies to reform their use of the "freemium" model in which apps are free to download, but then later require payments that often get charged to credit cards by default. The EU says consumer confusion with the freemium model threatens the long-term health of the continent's booming "app economy" that employs more than one million people and is forecast to produce €63 billion in total revenue in 2018, more than triple last year's level.
"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 regulator 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."
Notably, Apple recently reached an agreement with the FTC over in-app purchases for App Store applications. The company agreed to refund 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.
Read More