updated 09:52 am EDT, Wed May 21, 2014
Apps allowed to be marketed as 'free' despite costing money for progress
The Italian Antitrust and Competition Authority has launched an investigation into Amazon, Apple, Gameloft, and Google over complaints that the corporations are misleading people in the way they market "free-to-play" games. A number of mobile games -- including many targeted at children -- are nominally free, but in reality require in-app purchases of digital items, currency, levels, or features in order to make progress. Figures from the European Commission suggest that 80 percent of app revenues now stem from in-app transactions.
The ACA has sent a letter to the four companies, charging that they have given "misleading and/or incomplete information about the actual costs required for a complete experience" of the games in question, also failing to clearly indicate "the presence within the app of purchase offers" and how to "limit those purchases through the payment system associated with a Google, Amazon, and iTunes account."
While Amazon, Apple, and Google all run their own app stores, Gameloft is a publisher and developer, and the ACA accuses it of sending in-game messages that "incite children to make purchases or to persuade parents to do it." Amazon and Google have been singled out for special attention as well, since the companies let people toggle whether or not a password is needed each time an in-app purchase is made.
All four businesses have been given 20 days to comply with requests for information on their practices and a defense. If the allegations are later found to be valid, each guilty party could be fined up to €5 million ($6.84 million), proportionate to the company's size. That would presumably lower the fine for Gameloft.
The investigation is expected to be finished within seven months. Gameloft says it is doing its own internal probe, but has otherwise refused to comment.
The ACA's interest is said to have been spurred mainly by a game called Littlest Pet Shop, which is developed by Gameloft and available on Amazon, Apple, and Google's app stores. It uses two forms of in-game currency which, while earnable just by playing, can also be bought outright with real money.