FTC Examines Apple’s In-App Purchases (For the Children)

Apple vs. FTC
The U.S. Federal Trade Commission said it would be reviewing in-app purchases Tuesday. In a written response to Massachusetts Representative Ed Markey (D), FTC Chairman Jon Leibowitz said that his agency will be looking at the mobile apps industry as a whole following a Washington Post article highlighting parents who found themselves with big bills from Apple after their kids made many and more in-app purchases in iOS games.

Rep. Markey said in a statement that, “After the Washington Post first broke this story earlier this month, I sent the Federal Trade Commission a letter calling on the agency to investigate the issue of ‘in-app’ purchases and provide additional information about the promotion and delivery of these applications to consumers, especially with respect to children.”

He added, “What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area.”

The response (published by The Post) Mr. Market referred to was the letter from FTC Chairman Jon Leibowitz, which said, “We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases. Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications.”

By definition, Apple would not be the sole target of such a review, but the reality is that the company is the top dog by far in the mobile app space, and will therefore likely be the recipient of the closest — and highest profile — scrutiny.