Freemium model facing watchdog probe

Freemium model facing watchdog probe

By Stuart Dredge

February 23rd 2011 at 12:52PM

'We will closely monitor this industry practice' says FTC

The US Federal Trade Commission is looking into reports of children blowing their parents' credit cards on mobile social games.

The FTC says it's aware of complaints that in-app payments can allow children to spend money within mobile social games without their parents' permission, and is looking into the issue.

In a letter to Democrat congressman Ed Markey, who had asked about the problems, FTC chairman Jon Leibowitz reveals that the matter is firmly on its radar. The Washington Post quotes his letter:

"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."

iOS games like Smurfs' Village were the first to be subject to these complaints last year, as parents realised that once they had logged in to the App Store on a device, there was a 15-minute window during which any further purchases - including IAP - did not require a password.

As several children racked up big bills on in-game SmurfBerries in Capcom's social game, media reports began to criticise the practice. With Android and BlackBerry also getting in-app payments this year, it is no surprise the FTC is looking into what (if anything) needs to change to prevent further complaints.

Artical originally appeared on Mobile Entertainmment