14 DAY TRIAL // Apple, Amazon, Google, and Gameloft are facing a fine of up to €5 million ($6.9 million) if they cannot prove to Italian regulators that they aren’t engaging in unfair practices with their in-app purchasing systems. The technology quartet have 20 days to comply, or else.
Italy's Antitrust and Competition Authority recently put out a press release stating that the regulatory body “has launched an investigation into the behavior of two companies of the Google group, the Apple subsidiary for iTunes Store in Europe, Amazon and Gameloft – a company which develops and edits videogames that can be downloaded from Internet – concerning anApp advertised as ‘free,’ while purchases are in fact required to continue the game.”
The announcement continues with Italy’s ACA noting that “The probe will verify whether the conducts can be regarded as unfair commercial practices: consumers could falsely believe that the game is entirely free and, in any case, that they would know in advance the full costs of the game. Moreover, insufficient information seems to be provided to consumers about the settings needed to stop or limit the purchases within the App.”
Apple is not at its first run-in with authorities over the freemium app model, having had to pay considerable sums of money to families whose kids unknowingly carried out in-app transactions for goods like a special armor for a character, a chest of gems or virtual coins to unlock a certain level, etc.
According to ZDnet, the four companies now have 20 days to respond to ACA’s allegations, providing the necessary evidence that they are, in fact, going to great lengths to make it clear to the customer which apps are completely free of charge and which apps require further money spending to unlock content.
The Italian regulator said the fine could reach €5 million ($6.9 million) for the company that fails to prove it is acting lawfully, but reportedly added that “the punishment would be proportional to each company’s size.” In other words, Gameloft could end up paying the smallest fine, if proven guilty.
The in-app purchasing model, also referred to as “freemium,” is a type of monetization that Apple itself encouraged when it banned demos and free trials from its App Store. The argument made at the time (2008-2009) was that there was no other way to ensure a fully-curated app distribution service, though one could assume Steve Jobs had profits in mind all along.
Apple requires a great deal of clarification on behalf of its developers when it comes to marketing freemium apps, and the company itself has released support documents and guides aimed specifically at parents with the purpose of tutoring them on in-app purchases.