Posts tagged Purchases
When it comes to cracking down on the predatory practices of in-app purchases found in “free to play” mobile app games, the European Union is looking out for the kids. “In particular, children must be better protected when playing online,” reads the European Commission press statement announcing its latest enforcement action.
But won’t somebody please think of the grown-ups?
Opportunities to lighten your digital wallet in exchange for in-game tchotchkes have grown ever-more insidious even for the supposedly mature set. Remember Farmville? Candy Crush? Now it’s possible to level-up your way into debt with the “free” game of conspicuous consumption, Kim Kardashian: Hollywood.
Adults, too, are vulnerable to the in-app purchases offered within “free” games—the simpler the game, the better. As numerous studies find, tiny accomplishments—such as leveling up—release spikes of dopamine in the brain. That’s the neurochemical tied to pleasure and reinforced behavior.
Mobile game developers are well aware of what makes games engrossing enough to inspire impulse purchases. They just don’t share that information—or even a price list—with players.
If you haven’t personally experienced how engrossing such games can be, just take a look around. Take, for instance, whoever was in charge of the Twitter account for the EPA Office of Water. This person was apparently so entranced with the Kardashian game earlier this week that he or she let slip a tweet from the wrong account:
Hilarity across the Twitterverse, and then the network morning shows, ensued. Everybody loves a good twit slip. And EPA recovered with good grace:
Buckraking The Mobile Way
But what’s less funny is the fact that Kim Kardashian: Hollywood is projected to rake in $200 million this year, most of it likely not earned from kids who don’t know better. (Kim’s take is estimated at just $85 million.)
How do “free” mobile apps such as the Kardashian game earn money? Not in any transparent way, and that’s one of the EU’s complaints.
When reviewing the text that accompanies Kim Kardashian: Hollywood or Candy Crush or any similar game, you won’t find any disclosures—no price list breaking down what kind point-of-purchase surprises you’ll be offered to enhance your game play or when these premiums will appear. Like that magazine with intriguing gossip, or that glasses repair kit, astrology guide or candy bar you suddenly realize you need at the check-out counter, you’ll see it when you see it.
The Kardashian game offers a new twist by giving players a shortcut to Kim’s “level” of fame. Instead of “working” one’s way up the Hollywood food chain via Kim’s kindly mentoring (“dating famous people will get you more fans,” she notes), players can skip ahead by dropping $99 of real-world fiat cash on virtual K-Stars, thus paying their way to the red carpet.
Parental Controls Don’t Protect Parents—Or Anyone Else
Tales such as the 8-year-old girl who blew $1,400 on smurfberries in Smurfs Village iPad game—just one of many complaints that led to an FCC investigation and Apple’s $32.5 million in payouts to parents—mean more protection of Mom and Dad’s wallet. But parental controls that prevent kids from accessing app store wallets mean little to grownups. Ask any Candy Crush addict whose dropped hundreds, even thousands of dollars to level up, thus contributing to the nearly $100,000 Candy Crush is estimated to bring in daily.
This lack of transparency is one of several in-app purchase problems the EU urges Google and Apple, as well as developers, to address. “Games advertised as ‘free’ should not mislead consumers about the true costs involved,” reads one of the EU’s demands. “Consumers should be adequately informed about the payment arrangements for purchases and should not be debited through default settings without consumers’ explicit consent,” is another.
In the traditional gambling industry, the U.K. government is pressing mandatory rules to prevent predatory practices against habitual gamblers. In the world of mobile games, transparent practices, including a detailed price list alerting players to potential costs, is a reasonable request.
It’s no coincidence the supermarket checkout line is full of potential purchases—such random selections are the results of years of psych research from advertising agencies. All the better to appeal to your impulse control (or lack thereof)! One difference between “free” mobile apps with opaque in-app purchase prices is this: Most people aren’t constantly going through the supermarket checkout line.
Lead image courtesy of Shutterstock; game image courtesy of Kim Kardashian: Hollywood
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Today comScore, Neustar Localeze and agency 15 Miles released the findings from their latest Local Search Study. Now in its seventh year, the survey of nearly 5,000 US adults was conducted in December 2013. Respondents “were individuals who [had] conducted a local business search in the last…
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Apple agreed to settle with the Federal Trade Commission on Wednesday after a formal complaint said the company was billing customers for millions of dollars worth of App Store purchases made by children without their parents’ consent.
The initial complaint alleged Apple was in violation of the FTC Act by not informing parents that once they initially entered their Apple ID username and password combination to purchase an app or an in-app item, their iOS device would approve any further purchases for the next 15 minutes without asking for further authorization.
The FTC said in its complaint that Apple did not inform iOS App Store users about the 15-minute window that allows for unlimited charges, and as a result, Apple received tens of thousands of complaints about unauthorized purchases made by children. In one case, a little girl spent $2,600 worth of in-app purchases in the game “Tap Pet Hotel,” while the report mentioned other children making purchases totaling over $500 in apps like “Tiny Zoo Friends” and “Dragon Story.”
Apple CEO Tim Cook sent a letter to his staff about the settlement, which was procured by Re/code. In the letter, Cook defended the App Store’s 15-minute policy, claiming it was originally “aimed at making the App Store easy to use.” But after parents discovered their children racked up credit card charges in free games that offered in-app purchases and subsequently filed a class action lawsuit in 2011, Apple “moved quickly to make improvements,” even adding a few additional steps to the purchasing process in the App Store.
Last year, we set out to refund any in-app purchase which may have been made without a parent’s permission. We wanted to reach every customer who might have been affected, so we sent emails to 28 million App Store customers – anyone who had made an in-app purchase in a game designed for kids. When some emails bounced, we mailed the parents postcards. In all, we received 37,000 claims and we will be reimbursing each one as promised.
Apple settled its class action lawsuit last February, offering iTunes credits to parents and the option to receive a cash refund for claims over $30. But the FTC decided to step in anyway.
“It doesn’t feel right for the FTC to sue over a case that had already been settled,” Cook said in his letter. “To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.”
Apple agreed to provide full refunds to parents affected by their children’s purchases, promising a payout of at least $32.5 million. As part of the deal, the company has until March 31 to reform its billing practices. Apple in the future must also offer an option shut down the 15-minute authorization window that allows app users to buy in-app purchases without entering credentials.
“This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: whether you’re doing business in the mobile arena or the mall down the street, fundamental consumer protections apply,” FTC Chairwoman Edith Ramirez said in a statement. “You cannot charge consumers for purchases they did not authorize.”
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