Lawmakers want FTC to investigate iOS games’ in-app purchases

Feb 18, 2011
Games

Parents are still finding huge iTunes bills because of in-app purchases in “freemium” games, and it’s happened so much, apparently, that some lawmakers want the government to investigate. The issue centers around the freemium iOS game, Smurfs’ Village, by Capcom Interactive — currently the fourth-highest grossing app in the App Store, despite being free to […]

Parents are still finding huge iTunes bills because of in-app purchases in “freemium” games, and it’s happened so much, apparently, that some lawmakers want the government to investigate.

The issue centers around the freemium iOS game, Smurfs’ Village, by Capcom Interactive — currently the fourth-highest grossing app in the App Store, despite being free to download. Smurfs’ Village operates a lot like other freemium games — it’s free to download and free to play, but include real-money purchases within the app. The game is designed to limit how much you can really do in a set amount of time. As you build your Smurf village in the game, you can speed up its progress by purchasing “smurf berries.” Otherwise, like in most freemium games, you have to wait for things to happen.

Smurfs’ Village is very much a game for smallish children. That’s part of the apparent issue with the game, because parents are apparently downloading the game using the iPhone or iPad’s onboard App Store app, which requires a password input. The way Apple (AAPL) has designed the App Store, if you make a purchase and input your Apple ID password, you can make more purchases for the next 15 minutes without having to re-enter it. It’s a convenience step, but apparently it leaves open a gaping spending window for children to inadvertently spend all their parents’ money.

The part that gets Capcom, the developer of Smurfs’ Village, in trouble is the fact that it has a lot of tiers of smurf berry purchases. The berries start in small amounts, running just a couple of dollars, but go all the way up to a huge $99.99 offer. Capcom added a warning to the app’s description in iTunes, but that apparently hasn’t stopped parents from getting their bills inflated from heavy smurf berry trafficking, with one kid spent as much as $1,400 within the app.

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The Washington Post reported that some democratic lawmakers want the Federal Trade Commission to check out the situation and investigate both Capcom and Apple (which gets a 30-percent cut). The lawmakers think the app and others like it, along with Apple’s password policy (which Capcom has no control over) is set up to help parents get bilked.

According to a report from Pocket Gamer, Apple isn’t very happy with Capcom over the game and its in-app purchases either, and supposedly there have been a lot of refunds to angry parents. And rumor has it that Apple is also considering altering the password-free window for iTunes, since other steps don’t seem to be curbing the threat of smurf berries — although that wouldn’t help anyone if the kid knows the parent’s Apple ID password. The report says Apple thinks a five-minute password window might help, rather than a 15-minute one.

We should note that in-app purchases can be turned off before any of this happens. Pulling open “Settings” and tapping the “Restrictions” tab takes you to what are, basically, parental controls. It’s not exactly obvious from the outside, but this tab gives users the ability to restrict all kinds of content and abilities, including in-app purchases. However, if a kid already knows the iTunes password, surely he or she can find a way to turn these restrictions off again.

Another freemium game maker, Recharge Studios, posted a blog on its site hoping to make clear how in-app purchasing in its game (Dolphin Play) works, and wrote a letter to Apple urging the company to make the nearly opaque App Store refund process more clear to users. Recharge also details all the steps necessary to request a refund from iTunes.

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It’s tough to resist the urge to assign blame in a situation such as this, because, depending on your point of view, everyone in the on-going story of freemium purchases is responsible. But clearly Apple needs to take steps to alter the way freemium games do business, if for no other reason than to avoid so much bad press and the attention of lawmakers eager to create restrictions on the App Store. A bad situation is only going to get worse if Apple sits on its hands.

But it’s also important for users to know what they download and how it works. There aren’t much in the way of viable excuses if parents don’t take the time to see what their children are playing before they let the children play it — five or 10 minutes with Smurfs’ Village would make the in-app purchasing very apparent (and the same is true with most other freemium games). These are devices that do a lot of things, and not knowing really how one works, including how to set restrictions on it, before handing it to a child is a really bad idea in general.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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