Office Of Fair Trading Launches In-App Purchase Investigation

The Office of Fair Trading (OFT) has launched an investigation into whether children are being unfairly pressured or encouraged to pay for additional content in ‘free’ app-based or web-based games.

Some games such as Zynga’s Farmville and EA’s Real Racing 3 are free to play or install, but offer the chance to unlock more content such as items or in-game currency through in-app-purchases. Currently, 80 of the 100 top-grossing Android applications employ this ‘freemium’ model.

In the last few months, there have been a number of reports claiming that children have been purchasing items worth thousands of pounds, unbeknown to their parents, while complaints to PhonePayPlus, the UK regulator of premium rate phone services, have risen by 300 percent.

OFT app investigation

“We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs,” said Cavendish Elithorn, OFT senior director for goods and consumer.

“The OFT is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected. We are speaking to the industry and will take enforcement action if necessary.”

As part of its investigation, the OFT has written to the developers of these games, requesting information about potentially misleading or commercially aggressive practices they are aware of in relation to these games, and has also asked parents and consumer groups to contact it.

Specifically, the OFT is looking into whether these games include ‘direct exhortations’ to children that would encourage them to make a purchase or persuade their parents to make one on their behalf. This would be unlawful under the Consumer Protection from Unfair Trading Regulations 2008.

Misleading consumers?

OFT will consider whether the full cost of some of these games is made clear when they are downloaded or accessed and whether they are leading children and parents to make decisions that they may not have made if prices were more transparent.

PhonePayPlus said that two in three children aged between 11 and 16 had downloaded a free app onto their phone, increasing the risk of voluntary in-app purchases from legitimate applications or involuntary charges from malware masquerading as genuine, popular titles.

The regulator said parents and children should be aware of the potential costs of smartphone apps and should investigate content restriction options or take out pay-as-you-go price plans.

How much do you know about smartphones? Take our quiz!