Commission and Member States to raise consumer concerns with app industry
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.
The four most important issues raised by consumers are:
- Games advertised as “free” should not mislead consumers about the true costs involved;
- Games should not contain direct exhortations to children to buy items in a game or to persuade an adult to buy items for them;
- Consumers should be adequately informed about the payment arrangements and purchases should not be debited through default settings without consumers’ explicit consent;
- Traders should provide an email address so that consumers can contact them in case of queries or complaints.