FTC to look into in-app purchase process for virtual goods

The Federal Trade Commission will look into the App Store’s in-app purchasing system—but not because of the much-debated subscription option. According to The Washington Post, the agency will review apps that themselves sell virtual goods, especially those targeted at children.

FTC commissioner Jon Leibowitz penned a letter to Representative Edward Markey (D-MA), in response to the congressman’s missive from earlier this month, informing him of the FTC’s decision. Markey’s concerns were spawned by reports of children buying expensive in-app purchases for virtual goods in games, unaware of the real-world consequences. One child reportedly spent $1400 on in-app purchases in Capcom’s Smurfs’ Village app.

While Apple does require a password to for both app purchases and in-app purchases, there’s a 15-minute window in which users do not have to re-enter their password, for the sake of convenience. If a parent enters a password to purchase an app, then hands off their device within 15 minutes, a child can buy goods without having to provide the password again.

In a portion of the letter, obtained by the Post, Leibowitz writes: “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.”

Markey, for his part, seemed pleased by the decision. In a statement, he said, “I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area.”

While Apple does currently provide parental controls that can restrict both access to the App Store or in-app purchases, it would seem that the best course of action for the company to pursue would be an additional option to disable the 15-minute window by requiring passwords for all purchases. Such a move would likely quell the complaints of many critics without infringing upon developers’ ability to provide in-app purchases.

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